June 20, 2023 | Daily JAM, Dividend Income, DVN, PXD, Videos |
Today’s Trend of the Week is Which is it? OK Growth in the U.S. or Not Great Growth Globally? The U.S. market is rallying and the rally even expand from the narrow nine stocks that have been driving up the indexes. The consensus is the U.S. economy will avoid a recession, the Fed will continue to pause rate hikes, and the U.S. economy as a whole is in decent shape. The problem is that the global economy presents a completely different story with asset values pricing in slowing growth. This shows up most clearly in oil prices, which have been in a downward trend. On June 13, West Texas Intermediate was selling below $70 a barrel, and Brent was down to 74.57. Goldman Sachs has cut its end-of-the-year oil price forecast by about 10%. This cut assumes continued lower demand from China and a supply glut, especially from Russia, as that country produces above agreed-upon caps in an effort to fund its war in Ukraine. If you own oil stocks right now, confirm that the ones in your portfolio can continue to make money at $70 a barrel (at least enough to cover dividends). I’d note the lowest cost source in the United States is in the Permian Basin. Companies like Pioneer National Resources and Devon Energy are focused on production from that region.
June 6, 2023 | Daily JAM |
The Russian government insists that the country has cut oil output as promised. But all the available numbers day that Russian crude oil is flowing at above levels agreed with OPEC. Of course, it’s hard to tell because Russia has stopped reporting key export figures. Russia restricted oil-output data last year due to its “sensitive” nature. And Russia’s Federal Statistics Service stopped publication of crude and condensate output earlier this year until April 2024, following a government decree. That has left oil industry analysts seeking to extrapolate Russia’s crude exports from data such as seaborne shipments. From that indicator it looks like Russian crude flows to international markets are more than 1.4 million barrels a day higher than they were at the end of last year.
June 5, 2023 | Daily JAM, Morning Briefing, Uncategorized |
U.S. oil benchmark West Texas Intermediate fell 0.57% today to $71.74 a barrel and international benchmark Brent crude lost 0.46% to $76.31 a barrel. In spite of a big cut in production announced this weekend by Saud Arabia. The voluntary cut of an extra 1 million barrels a day in July will take Saudi production to its lowest level in years.
April 5, 2023 | Daily JAM, Dividend Income, DVN, Jubak Picks, Volatility |
Just in case there are readers who don’t watch my videos, but do follow my picks. Today, April 5, I added Devon Energy (DVN) to my Jubak Picks, Dividend, and Volatility Portfolios.
April 3, 2023 | Daily JAM |
Today oil prices and oil stocks are soaring on the bullish case that the surprise OPEC+ production cut will push gasoline to $4 a gallon and oil to $100 a barrel. Not everyone buys the bullish case–at least not after a few days of what these analysts call a knee-jerk reaction. And they’ve got a point
April 3, 2023 | COP, Daily JAM, EQNR, Mid Term, Morning Briefing, PXD, USO |
Today the prices of oil and oil stocks have soared. At 11:20 a.m. New York time U.S. crude benchmark West Texas Intermediate was up 5.37% to $79.73 a barrel. International benchmark Brent crude was higher by 5.24% to $84.08 a barrel. Among oil stocks, Pioneer Natural Resources (PXD) was up 3.53%; ExxonMobil (XOM ) was up 5.48%; Chevron (CVX) was up 3.73%; Equinor (EQNR) was up 5.91%; and ConocoPhillips (COP) was up 7.79% The U.S. Oil Fund (USO) was higher by 5.40%.
April 2, 2023 | Daily JAM, Short Term |
Sunday’s surprise Saudi supply cut will send oil prices higher and to take a bite (your guess is as good as mine) out of the financial markets. On Sunday, April 2 (thank goodness this wasn’t announced yesterday on April Fool’s Day) OPEC+ announced a surprise oil production cut of more than 1 million barrels a day. The organization had not so long ago promised assurances that it would hold supply steady. Supply was already looking tight for the second half of the year and this round of cuts–led by Saudi Arabia’s, 500,000 barrel-a-day reduction–will send oil prices higher.
February 28, 2023 | Daily JAM, Jubak Picks, Short Term, USO |
Oil prices fell again in February with crude dropping another $2 a barrel on the month. Crude prices really didn’t show much of a trend in February as worries over an economic slowdown caused by higher interest rates battled signs of tighter supply. The reading range for the month was the smallest since July 2021. Signs of increased demand from China and the continued bite of sanctions against Russia point to gains for oil in coming months.
December 5, 2022 | Daily JAM, Morning Briefing |
As of 12:45 p.m. on Monday, December 5, U.S. benchmark crude West Texas Intermediate was down 1.63% to $76.68 a barrel. International benchmark Brent crude was down 1.39% to $84.38 a barrel. Brent is now up 11% this year but down from $120 a barrel in June. The market is a battleground today between cuts to supply and worries about a slump in global demand.
December 3, 2022 | Daily JAM |
On Friday, the European Union agreed to impose a $ 60-a-barrel cap on all purchases of Russian oil. Pay more than that and sanctions kick in that include a ban on shipping and insurance on any oil shipments when the oil has been purchased above the $60 a barrel price. That would have produced enough chaos on its own since the announcement of the cap came before oil, insurance, and shipping companies saw the full details of the sanctions. That effect is that nobody will be quite sure what purchases will trigger what sanctions when trading begins on Monday morning. One possibility is that conservative company lawyers will decide not to do a deal when they can’t figure out the consequences. At the least, that problem will slow the market on Monday. And then today, Russia announced that it will not accept the $60 per barrel price cap for its crude oil Nobody has any idea what that means (but I’ll give you my read below) Suffice it to say, that oil market chaos is a possibility
November 29, 2022 | Daily JAM, Morning Briefing |
Today, November 29, U.S. crude benchmark West Texas Intermediate traded at $78.45 a barrel. International benchmark Brent crude was at $83.26 a barrel. A month ago on October 28, West Texas Intermediate closed at $88.11 a barrel and Brent at $95.94. That price plunge is the background for Sunday’s regular meeting of OPEC+ oil ministers. Market speculation points to a strong chance of another cut in production following on the cut announced at the group’s October meeting. At the least, oil analysts say, OPEC+ will extend the October production cuts through the end of 2023.
October 10, 2022 | Daily JAM, Morning Briefing |
On Monday Russia launched “a massive strike (the words of Russian President Vladimir Putin) on civilian infrastructure, including crowded train stations, in Ukraine in retaliation for the explosions Saturday that destroyed a crucial ridge linking Russian-occupied Crimea to Russia. Russia has blamed Ukraine for the destruction of the bridge. The Ukrainian government has, so far, not claimed responsibility for the action, but U.S. sources are telling the Washington Post and the New York Times that the destruction was the work of Ukrainian special forces. The Russian attacks were horrifically indiscriminate. According to the Washington Post, the attack caused electricity outages and disrupted water supplies in cities across Ukraine. For a third night in the past week, a residential apartment building in the southeastern city of Zaporizhzhia was hit. In Kyiv, the missiles caused heavy explosions around 8:15 a.m., leaving vehicles in flames near Taras Shevchenko Park — on a road often jammed with rush-hour traffic. Besides a general increase in fear and uncertainty–the VIX “fear index claimed 5.99% to 33.24 as of noon in New York on Monday, October 10–in the financial markets, I think investors should focus on the implications for the oil market and oil prices.
