August 22nd, 2014
A century ago, the opening of the Panama Canal changed the face of global trade.
By joining the Atlantic and Pacific oceans, ships from the East Coast no longer had to make the treacherous 8,000-mile trip around Cape Horn to reach the markets in Asia or on the West Coast.
Now, 100 years later, the 50-mile long canal is about to do it all over again.
Under a $5.3 billion expansion, the canal is getting a makeover that will allow it to accommodate ships as long as three football fields, with the capacity to carry almost three times the amount of cargo.
Once completed, the “new” canal will help jump start U.S. energy exports to Asian countries that are starving for them.
In fact, it’s just one of two major catalysts that will catapult the U.S. into one of the world’s biggest energy exporters…
August 21st, 2014
Despite a world of geopolitical tension, oil prices have remained steady.
West Texas Intermediate (WTI) has been holding in the mid $90′s, while Brent continues to trade in the low $100 range.
This trading dynamic tells us two things…
First, traders obviously do not think the crises in Ukraine, Iraq, or Gaza will have a major impact on the global market (at least not yet). As a result, they are discounting the impact of the tensions on overall availability.
Second, other hotspots – especially the ongoing hostilities in Libya – are having an immediate knock on effect when it comes to crude supply.
In this case, traders are factoring in a couple of related dimensions – the lower worldwide demand that is expected this time of year, and the rise in other sources of oil – especially unconventional (tight and shale) production in North America.
This is causing traders to discount the impact on overall deliverability as well.
As a result, the daily news does not seem to be adversely impacting the price of oil.
But that doesn’t mean we’re out of the woods yet – not by a long shot…