Russia, Iran and Qatar, the world’s three biggest natural gas producers, publicly said they intend to form a natural gas cartel that would mimic OPEC for oil. Irwin Greenstein says this could create a major inflation headache across Europe and Asia. And that could send investors running back to the US.
The US consumer is on life support. Retail sales cratered in September, and consumer confidence indexes are at rock bottom. Uncle Sam is gearing up for a new New Deal to resuscitate the patient, says Justice Litle. It will focus on alternative energy projects… and could create the next big bubble.
Commodities across the board are being taken down by the deepening credit crisis. But energy policy is a big issue in the coming presidential elections.
Energy investor T. Boone Pickens says “natural gas is the fuel of the future.” He also says water will become an increasingly scarce commodity with major implications for the agricultural sector.
Chris Mayer agrees with Pickens. He says once the financial crisis ends natural gas and water stocks will attract big bucks.
Is nowhere safe? Even physical assets – which are usually considered a safe-haven from stock market turmoil – have fallen sharply in the last month. Only gold and silver have held up against the tide…just. Commodities specialist Lee Lowell says there will be plenty more volatility in the weeks to come. But he says those who do not join the panic selling will win out in the end…
E.On (OTC:EONGY) took a bite out of Gazprom (OTC:OGZPY) today. Germany’s largest utility company just got nearly a quarter of Gazprom’s Yuzhno Russkoye natural gas field. And all it had to do was give back some of the Russian giant’s stock. Not bad.
Clean energy ETFs became hugely popular in 2007. But they’ve been taking a beating since this August, when crude oil prices began to fall from their year highs.
Nevertheless, Jim Stanton says alternative energy — and the wind-energy market in particular — has a big future. Wind energy is already the second largest source of new power generation in the US, and it now has the backing of the much-hyped Pickens Plan.
Jim says two clean-energy ETFs that look undervalued right now are PBW and GEX. He also recommends FAN for a more wind-specific ETF.
On Tuesday, the Reuters/Jefferies CRB commodity index had its best day in history. “Nearly all commodities enjoyed a goosing yesterday,” according to Addison Wiggan and Ian Mathias in the 5 Min. Forecast.
However, Eric Roseman says, “Until the deflation ceases, commodities will remain vulnerable. Never in the history of capitalism have commodity prices rallied during a severe contraction in bank credit.”
Nevertheless, he predicts that inflation is still hard-wired into the global economy. That’s why he’s buying distressed oil companies and oil equipments stocks alongside the best-positioned global insiders.
Russia’s main stock markets remain closed this morning after a slump in equities prompted the authorities to suspend trading. Falling commodity prices and financial turmoil have hit Russian investors hard. But Money Morning’s Jason Simpkins says Putin-lead Russia has itself to blame for scaring away foreign investment with its heavy-handed policies.
As of today crude oil prices are down 36% from their July peak.
David Fessler says a fall in global demand is temporarily driving crude lower. But population and income growth will restore global demand for energy soon. This means the US will have to compete with emerging giants China and India for supplies.
David says the only long-term solution is to find cheaper alternative energy sources. When Congress realizes this shares in companies such as Clean Energy Fuels Corp (NASDAQ:CLNE) and Vestas Wind Systems (OTC:VWSYF) take off.
Penny Sleuth UK’s Tom Bulford says Ascent Resources (LON:AST), a small-cap company in the oil-and-gas business, has great potential.
It has a conservative business strategy. It operates only in stable political climates. It prefers on-shore to off-shore projects. And it targets the relatively more stable natural gas market over oil.
Tom says Ascent’s stock has performed poorly in the last year. But high expectations over a new exploration project in Italy’s Po Valley could trigger a major rally.
