Thursday, October 20, 2011

Oil Prices high and going higher

From a comment to an article about Middle Eastern changes:

I recently spent an evening with Ambassador Richard Jones, the Deputy Executive Director of the International Energy Agency in Paris, who had some eye opening things to say about the energy space. The IEA was first set up as a counterweight to OPEC during the oil crisis in 1974, and has since evolved into a top drawer energy research organization.

World GDP will grow an average 3.1%/year through 2030, driving oil demand from the current 84 million barrels/day to 103 million b/d. That means we will have to find the equivalent of six Saudi Arabia’s to fill the gap or prices are going up, possibly a lot. His conservative target has crude at $190 in twenty years. Some 39% of that increase in demand will come from China and 15% from India.

A collapse in investment caused by the financial crisis means that supply can’t recover in time to avoid another price spike. More than 1.5 billion people today don’t have electricity at all, but would love to have it. The best the climate negotiations can hope for is for CO2 to rise until 2020, and then plateau after that, because once this greenhouse gas enters the atmosphere it is very hard to get out.

This will require a massive decarbonization effort reliant on nuclear, hydro, alternatives, and carbon capture and storage. Up to half of the needed carbon reduction can be achieved through simple efficiency measures, like ditching the incandescent light bulb, driving more hybrids, and closing dirty, old coal fired power plants. Natural gas will be a vital bridge, as it is cheap, in abundant supply, and emits only half the carbon of traditional fossil fuels. The total 20 year bill for the rebuilding of our new energy infrastructure will exceed $10 trillion.
Richard, who comes from a long diplomatic career in Kuwait, Kazakhstan, and Israel, certainly didn’t pull any punches. I have been a huge fan of the IEA’s data for 35 years. Better use any weakness in oil prices to accumulate long term positions in crude through the futures, the offshore drilling companies like Transocean (RIG), and oil and gas plays, and (OXY) (click here for the link). When oil comes back, it will do so with a vengeance.

The Goombarh deems this very important to understand what is driving oil/energy prices.
Marco G.

Tuesday, October 18, 2011

Two Kurdistan oils and Market Turns

Two Kurdistan oils and Market Turns

TAQA takes stake in WesternZagros before new well
Mon Oct 17, 2011 1:57pm EDT
* Abu Dhabi company invests $46.6 mln to take 19.9 pct
* WesternZagros can now fund Sarqala-2
* CEO says he did not speak to Tony Hayward's group
* Shares jump 17 pct
CALGARY, Alberta, Oct 17 (Reuters) - Abu Dhabi National Energy Co will invest C$46.6 million ($46 million) in WesternZagros Resources , giving the Canadian-based oil explorer much-needed financial breathing room as drilling draws near for its next big well in Kurdistan in northern Iraq.
Shares in WesternZagros jumped more than 17 percent on the small-cap TSX Venture Exchange on Monday after the Abu Dhabi company, known as TAQA, agreed to take a 19.9 percent stake. of the report is here @ Reuters:

The Goombarh feels slightly vindicated, as his investing in Westernzagros (TSX: WZR) has just received a vote of confidence from a connected Middle Eastern Oil company, yet his investment in Vast Exploration  (TSX: VST) has tanked, from their uneconomic well in Qara Dagh.
My moves forward from this is that I am holding onto both of these oil explorations; one because of the above news and the other, is because I would be a buyer at these prices (.04~.05 cents).  For those of you who were influenced by me, and have loss money, I am sorry, for those of you who have not, well here are two prime suspects for price appreciation.
Now, as to the general markets, it looks like the worm has turned, so to speak.  The bottom may have been a week and a half ago.  Note, that the Goombarh, as usual was overly optimistic and called the bottom a month or more ago.  Whatever the case, now is the time to be getting back in, if you are not already back in.  The gains you make are dependent upon your entry prices to your investments; the entry prices presently are very good.
Here's to a good fall, what's left of it,
Marco G.

Thursday, October 6, 2011

Fisher and the Goombarh Bullish

Ken Fisher is a noted billionaire and financial advisor for the wealthy.  Though he is criticized for being a pernenial bull, his firm's analysis of the macro economic situation always makes good sense, at least to the Goombarh.

Following is a capsule summary of his latest quarterly analysis. 

Click on the link to download the full report.

As for my stocks, quite a few have crashed, in fact the whole portfolio has cratered, but I can not sell at the lows.  Therefore, I am still sitting tight from my summer positioning and grinning and bearing it.