Crude oil prices slipped below $60 a barrel yesterday, taking the black goo to a 20-month low. But that doesn’t change the fundamentals. Oil production is levelling out, and will soon begin to fall. Andrew Gordon expects crude to soar back toward $200 after a short pause. And Big Oil companies that are still investing in new projects will shine.
Exxon Mobil Corp. (XOM) set a U.S. profit record today (Thursday) when it announced its third quarter profit topped $14.8 billion on record-high oil prices.
Choppy markets have sent dividend yields to “unbelievably high” levels, says Jim Nelson. This makes today a great time to start income investing. Jim says Royal Dutch Shell (NYSE:RDS:A/RDS.B) and BP (NYSE:BP) are two cash-rich companies with consistent dividend payments and “absurdly” high yields right now.
Penny Sleuth’s Tom Bulford says oil explorer BPC Limited (LON:BPC) could be onto big things in the Bahamas. The company has five prospecting licenses off the coast of the Caribbean island, where research suggests it could find major oil deposits. Tom says political stability and a great geographical location give this project serious potential…
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.
Gas prices have soared in the aftermath of hurricane Ike due to damage inflicted on major Gulf Coast refineries. Unleaded regular has risen 17 cents since the storm hit to reach $3.842 a gallon. Money Morning’s William Patalon III says gas shortages from a tough hurricane season are likely to affect much of the Southern US.
Inflation Still Threatens Japan; Time-Out for Northrop and Boeing; Citi Takes a Hit on Fannie and Freddie; Chinese Inflation Subsides; ImClone’s Secret Admirer; Bank of America Settles; Management Shake-Up at Sanofi-Aventis; Shell Evacuates in Face of Hurricane Ike
After declining for 15 years, U.S. natural gas production is finally on the rise, thanks to new technological developments that make it possible to draw large amounts of gas from deposits previously thought to be unreachable. An increase in natural gas production of the magnitude many industry insiders predict could do wonders for business, the environment and even U.S. energy independence.
The Reuters/Jefferies CRB Index shows commodities jumped 29% in the first six months of this year - the best first half for more than 30 years.
But there is much talk now of a “commodities bear market” and the popping of the so-called “commodities bubble” as prices pull back from their highs.
Jim Rogers, however, remains a commodities bull. “This bull market is not magic,” says Jim, writing in Whiskey and Gunpowder. “It’s not some crazy ‘cycle theory’ I have. It does not fall out of the sky. It’s supply and demand. It’s simple stuff.”
China and Iraq will sign a deal next week to develop the Ahdab oil field, 100 miles southeast of Baghdad. The move comes at time when political gridlock and security concerns have cast doubt over several pending short-term contracts, says Jason Simpkins in Money Morning.