WHY OUR OIL PRICE FLUCTUATES?
Our country is not exception to the forces that bring oil price up and down.
So what is that forces so powerful that it can affect everyone’s life globally? According to Thomas Landstreet "MERE WORDS DRIVE OIL PRICES DOWN"
1. On July 14, 2008, with oil prices at all-time highs of $144 a barrel, then-President Bush approached a microphone and announced that the executive moratorium on drilling on the outer continental shelf would expire. Oil prices dropped 8% as he made the announcement and they never recovered.
2. Then after a violent 30% rally that September, Nancy Pelosi buckled and announced an end to the congressional moratorium on drilling. Oil prices fell from $120 the day she made the announcement to $66 per barrel by December
3. Neither of these announcements actually ever manifested as anything more concrete than hot air.
Mere words in Spanish and English say the same thing
4. The Bureau of Energy Management announced two weeks ago that for the first time since 1983, the U.S. government would allow seismic analysis of the outer continental shelf off of the southern Atlantic coast.
5. Meanwhile, Mexico is hurriedly engaging foreign private companies to help them exploit their huge reserves.
Oil prices have a long way to fall if this continues.
6. Somehow, falling demand and rising supplies have failed to reduce oil prices.
More than mere words in Mexico: Liberalization has begun
7. In December 2013 Mexican President Enrique Pena Nieto enacted constitutional reforms to end state-owned Petroleós Mexicanos’ (PEMEX) 75-year monopoly over oil.
8. He then signed legislation on August 11, 2014 opening Mexico’s oil, gas and electricity industries to private and foreign companies.
9. The U.S. is projected to surpass Saudi Arabia in production due to fracking.
10. But despite its abundance, oil obtained from fracking, it is not the answer to lower prices because it is so expensive to produce – $70 to $90 per barrel.
11. According to Landstreet the framework is called Political Peak Oil is changing quickly. He predicted oil prices will hit $90 by Christmas barring any geopolitical crisis and a reversal of policy.
12. The investor ramifications are significant but the first place to start is to avoid heavily levered E&P fracking companies like Goodrich Petoleum.
13. If the price of oil falls like he thought it will, the stock in the market will go much lower.
14. Several ETF’s ** allow investors to short the commodity. Among them are: DUG and SCO.
15. Many companies will benefit from a lower oil price. Gas station operators’ margins expand when oil prices fall as they hesitate to lower the retail price in such an environment.
16. How can we apply that of our own to the world? : ) You may say we are just peanuts compared to the major oil player and so does the *tiny mid-east country that spun the world economies inside out upside down all this while. :))))
WALLAHU ALAM
** ETFs (Exchange Traded Funds) are funds that track indexes like the NASDAQ-100 Index, S&P 500, Dow Jones, etc.
When you buy shares of an ETF, you are buying shares of a portfolio that tracks the yield and return of its native index.
The main difference between ETFs and other types of index funds is that ETFs don't try to outperform their corresponding index, but simply replicate its performance. They don't try to beat the market, they try to be the market.
Our country is not exception to the forces that bring oil price up and down.
So what is that forces so powerful that it can affect everyone’s life globally? According to Thomas Landstreet "MERE WORDS DRIVE OIL PRICES DOWN"
1. On July 14, 2008, with oil prices at all-time highs of $144 a barrel, then-President Bush approached a microphone and announced that the executive moratorium on drilling on the outer continental shelf would expire. Oil prices dropped 8% as he made the announcement and they never recovered.
2. Then after a violent 30% rally that September, Nancy Pelosi buckled and announced an end to the congressional moratorium on drilling. Oil prices fell from $120 the day she made the announcement to $66 per barrel by December
3. Neither of these announcements actually ever manifested as anything more concrete than hot air.
Mere words in Spanish and English say the same thing
4. The Bureau of Energy Management announced two weeks ago that for the first time since 1983, the U.S. government would allow seismic analysis of the outer continental shelf off of the southern Atlantic coast.
5. Meanwhile, Mexico is hurriedly engaging foreign private companies to help them exploit their huge reserves.
Oil prices have a long way to fall if this continues.
6. Somehow, falling demand and rising supplies have failed to reduce oil prices.
More than mere words in Mexico: Liberalization has begun
7. In December 2013 Mexican President Enrique Pena Nieto enacted constitutional reforms to end state-owned Petroleós Mexicanos’ (PEMEX) 75-year monopoly over oil.
8. He then signed legislation on August 11, 2014 opening Mexico’s oil, gas and electricity industries to private and foreign companies.
9. The U.S. is projected to surpass Saudi Arabia in production due to fracking.
10. But despite its abundance, oil obtained from fracking, it is not the answer to lower prices because it is so expensive to produce – $70 to $90 per barrel.
11. According to Landstreet the framework is called Political Peak Oil is changing quickly. He predicted oil prices will hit $90 by Christmas barring any geopolitical crisis and a reversal of policy.
12. The investor ramifications are significant but the first place to start is to avoid heavily levered E&P fracking companies like Goodrich Petoleum.
13. If the price of oil falls like he thought it will, the stock in the market will go much lower.
14. Several ETF’s ** allow investors to short the commodity. Among them are: DUG and SCO.
15. Many companies will benefit from a lower oil price. Gas station operators’ margins expand when oil prices fall as they hesitate to lower the retail price in such an environment.
16. How can we apply that of our own to the world? : ) You may say we are just peanuts compared to the major oil player and so does the *tiny mid-east country that spun the world economies inside out upside down all this while. :))))
WALLAHU ALAM
** ETFs (Exchange Traded Funds) are funds that track indexes like the NASDAQ-100 Index, S&P 500, Dow Jones, etc.
When you buy shares of an ETF, you are buying shares of a portfolio that tracks the yield and return of its native index.
The main difference between ETFs and other types of index funds is that ETFs don't try to outperform their corresponding index, but simply replicate its performance. They don't try to beat the market, they try to be the market.
No comments:
Post a Comment