Category: Energy

The fixed income market can be hit by a perfect storm

The fixed income market can be hit by a perfect storm

The corporate bond markets, on both sides of the Atlantic, has been hit this week by a wave of declines. As a result, we saw high yield bond markets and also investment grade bond markets falling from the record levels reached weeks before. The US high yield bond index, one of the most important benchmark...

Petrodollars outflows from the financial markets. Will it last?

Petrodollars outflow from the financial markets. Will it last?

The time of the large inflows of petrodollars in the financial markets seems to be over. Now-days analysts talk much more about Petrodollars’ exodus. The blest countries with high budget surpluses because of the high oil prices now are in the hook. In their Sovereign funds, have been poured for years billions of dollars. The...

How low can the commodity prices go?

How low can the commodity prices go?

There’s been a great rally on the down side for the commodity prices. The down trend is very strong and the bulls will have to wait a little more before  we start to see again prices rising. Most likely we are in a distribution phase in these markets. Some of the over-investments that have been...

Where is the price of coal going ?

Where is the price of coal going ?

As the price of this asset depends a lot to the natural gas price and oil price, it’s hard to make previsions about the Gas-Vegas and Crude-Vegas “trends”. If we want to have an idea about what is going on with the price of coal, we must first take a look to the Oil price...

The shale oil supply puts new pressure on oil price

It seemed that the deep fall of the oil price would have had a strong impact on the shale oil industry. In fact, it has had for some time. That’s the reason why investors didn’t expected the numbers of rigs in the US, to rise the past week, and that’s the reason why the price...

Whiting Petroleum Corp, Oasis Petroleum, Apache Corp, EnCana, Devon Energy Corp, Anadarko Petroleum Corp. are only a few of the big names of shale oil sector in north America. These are some of the names that have given a boost to the fall of the oil price. Only in America there are 75 shale-focused companies with different sizes. What is going to happen with all these companies if the oil stays at this level? Many of them have big debts and have also big problems on paying the debts because the initial projections have been made with a 100 Usd oil price. Now many of these companies are under the eye of the majors. Exxon Mobil and Chevron most likely are going to buy some of them. The problem with these companies is also that their valuation is made on a reserve basis. As the price of oil has dropped the valuation will be less interesting from what the owners would like. This is a golden moment for the majors to enlarge their reserves with a cheap price. Now it remains to see if it will be a consolidation between peers or these small medium and large companies will finish in the belly of the largest and oldest oil companies. We know that the crises are made for the strongest. So if these companies come out from the hell they will be stronger in the future. The only thing we wait to know is the way these companies will escape from the death. Many analysts suggest that one of the ways to consolidate the sector would be a "stock for stock" because of the financing lack and the amount of the debt these companies already have. Otherwise the major part of them will be incorporated by any big fish of this market.

Time for a consolidation in the oil shale industry

Whiting Petroleum Corp, Oasis Petroleum, Apache Corp, EnCana, Devon Energy Corp, Anadarko Petroleum Corp. are only a few of the big names of shale oil sector in north America. These are some of the names that have given a boost to the fall of the price of oil. Only in America there are 75 shale-focused...