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Category: Sector
Oil Slips off an 11-Month High
Oil prices reached their highest level in eleven months in the middle of last week. The front-month futures contract did not post a key reversal on June 9, but the continuation contract did. Since reaching almost $51.70, prices have pushed lower, with lower highs and lower lows.
Nearly Double the Price, but Only Halfway Back
With today’s gains, the price of Brent has nearly doubled from its lows in January. Of course, the price of oil is still less than half of levels that prevailed two years ago. At the same time, many leveraged investors cast a jaundiced eye toward currency pegs. Many have concluded that the Middle East currency pegs cannot be sustained.
How could Fossil Fuel Divestment be Bad?
The global divestment movement is gaining steam. This involves investors like city councils, pension funds and universities publicly withdrawing their assets from coal, oil and gas companies – those that produce fossil fuels.
OPEC: Higher Prices, but not Higher Hopes
Just a couple months ago, some were declaring the old oil order dead after the Organization of the Petroleum Exporting Countries (OPEC) failed to agree on coordinated action at its April meeting in Doha.
OPEC Meeting: I’ve Got Expectations in Low Places
OPEC ministers meet in Vienna tomorrow. Expectations could hardly be lower. Attempts to agree on an output freeze were stymied by the Saudi’s insistence that is rival Iran participates as well. Iran cannot agree to limit its production yet, or it would have sacrificed (or postponed) it nuclear program for naught.
Could Cuts Now Create Oil Production Supply Reductions Later?
Total global oil production could decline for the next several years in a row as scarce new sources of supply come online. According to data from Rystad Energy, overall global oil output will fall this year as natural depletion overwhelms all new sources of supply. However, the deficit will only widen in the years ahead due to the dramatic scaling back in spending on new exploration and development.
Statoil says that global capex is set to fall for two years in a row, and is on track to fall for a third year in 2017 as more spending cuts are likely.
A Lesson on Competition in Aged Care Services
More competition in the delivery of human services, as recommended by the Harper Inquiry, is likely to increase the variety of services available, reduce the price of services and may encourage innovation. However, when it comes to aged care sector, competition may not necessarily result in better care, due to market failures.
China’s Great Firewall
For the first time this year, the United States Trade Representative’s (USTR) ‘National Trade Estimate Report’ took note of China’s Great Firewall. Granted, it was with this tame statement: ‘China’s filtering of cross-border Internet traffic has posed a significant burden to foreign suppliers’.
Oil, Lithium, and the Global Energy Situation
The energy sector was certainly a bargain in January, but no one really knows where oil will be around Christmas. While we may have already seen the bottom, stock prices are not the bargain they were. There are other plays. Think electric vehicles and even driverless cars. Find what’s undervalued now and get in on some of the games that will dictate glorious future wealth.
