LONDON, Dec 2 (Reuters) – Continental Resources, one of the
largest U.S. shale drillers, has learned the hard way that
hedging is like being pregnant: you’re either hedging or you’re
not. There is no middle ground. If you are not hedging, you are
gambling on future prices.
By lifting most of its hedges for 2014, 2015 and 2016, the
company, founded and majority owned by Chief Executive Harold
Hamm, has swapped its traditional hedging strategy for a gamble
on future oil prices.
LONDON, Dec 1 (Reuters) – “The market is not a weighing
machine, on which the value of each issue is recorded by an
exact and impersonal mechanism,” Benjamin Graham and David Dodd
wrote in their landmark work on “Security Analysis” in 1934.
“The market is a voting machine, whereon countless
individuals register choices, which are the product partly of
reason and partly of emotion.”
LONDON, Nov 28 (Reuters) – Following OPEC’s decision on
Thursday to leave production unchanged, Brent crude futures
experienced the first three-standard deviation down-move since
the flash crash of May 2011 and before that the depths of the
recession in March 2009.
With U.S. markets and financial institutions closed for the
Thanksgiving holiday, limited liquidity probably exaggerated the
scale of the move.
LONDON, Nov 26 (Reuters) – By now, everyone is aware of the
serious threat rising shale output from the United States poses
But sluggish demand growth in response to the quadrupling of
prices between 2002 and 2012 is at least as a big a challenge
for the cartel.
LONDON, Nov 24 (Reuters) – The State of New York produced
just 1,000 barrels of oil per day in 2013, but consumed almost
620,000 barrels per day of refined fuels, according to the U.S.
Energy Information Administration.
Virtually every gallon of gasoline which New York motorists
put into their cars, and the fuel oil used to heat their homes
and offices through the long, cold winter, was refined from oil
produced outside the state.
LONDON, Nov 21 (Reuters) – North America’s peak electricity
demand is forecast to increase by just 1 percent a year for the
next decade, the slowest rate of growth on record.
Energy efficiency and conservation programmes, as well as
time-of-use pricing, have weakened the link between economic
growth and electricity demand, and in some areas the correlation
is no longer positive.
LONDON, Nov 19 (Reuters) – “Keystone” would be a fitting
epitaph for Democratic lawmakers, who will lose their majority
in the United States Senate in January 2015.
By voting against the Keystone bill on Tuesday, Senate
Democrats have effectively ended the re-election hopes of Mary
Landrieu, a member of their own caucus from the strongly pro-oil
and pro-pipeline state of Louisiana who is locked in a run-off
after failing to win an outright majority in the mid-term
election earlier this month.
LONDON, Nov 19 (Reuters) – One of my first assignments as a
newly-minted graduate in the late 1990s was to produce a 30-year
forecast for the Bangladesh taka against the U.S. dollar on
behalf of a client contemplating a multi-billion dollar
Even then, I realised this was not a sensible question. I
wasn’t even sure how much of Bangladesh would still be above sea
level in 30 years, let alone the exchange rate. If the economics
of the project depended on an exchange rate forecast in three
decades time, it was not a very good project.
LONDON, Nov 18 (Reuters) – The biggest product of the U.S.
petroleum industry is not oil, gas or condensate but water –
billions and billions of gallons containing dissolved salts,
grease and even naturally occurring radioactive materials.
In 2007, when the shale revolution was still in its infant
stages, the U.S. oil and gas industry was already producing more
than 20 billion barrels of waste water per year, according to
researchers at the Argonne National Laboratory (“Produced water
volumes and management practices in the United States”, 2009).
LONDON, Nov 17 (Reuters) – As ministers from the 12 members
of the Organization of the Petroleum Exporting Countries (OPEC)
prepare to fly to Vienna for their 166th meeting next week, the
quiet consultations and soundings have already begun.
OPEC must decide whether and how to respond to the 30
percent decline in oil prices since the middle of June, in what
may be the organisation’s toughest test in five years.