We’re at the Dawn of a “New Energy Age”

by | published March 24th, 2015

Recently I received a very thoughtful comment from a subscriber.

In response to “The Truth About Iran’s Impact on Oil Prices,” Ramon had this to say about playing “the Iran card:”

Dr. Moors,

I find your updates very helpful in cutting through the chatter. After spending a large amount of time and resources trying to understand petroleum related energy, I developed this question.

If the budgets of OPEC and Non-OPEC oil dependent governments need in excess of $100bbl pricing to sustain their budgets, doesn’t this also signal that increases in the longer term will exceed that pricing?

I understand capital resets, restructures and bad bond debts will be had. However, since gold is “off the balance” sheets for fiscal responsibility, I surmise that black gold is not and therefore due to its world wide availability, this consumable will act as an asset class to sustain dependent governments in the long run.

While 2015 and 2016 will likely see WTI prices range from $55-$75 a barrel, I am developing an idea that 2017 and beyond will be significant or at least until other larger sources such as Nat Gas or Nuclear energy can ramp up.

Sorry for the long comment but what’s the longer play here? Is it oil, nat gas, or nuclear?

Now, I admit that I don’t respond to reader queries as often as I should, but Ramon’s comments deserve their due.

Here’s my response…

What the “Yellen Effect” Ultimately Means for Oil

by | published March 19th, 2015

Janet Yellen sure has a way with the markets…

As the Fed Chair delivered her unexpectedly dovish message, the Dow bounced almost 400 points off yesterday’s lows.

Even so, that move paled in comparison to the even bigger move she triggered in oil prices.

West Texas Intermediate (WTI) soared 3.7%, only to be topped by Brent, which jumped by 4.4%. That easily topped the 1.29% move in the Dow.

Yet the dramatic market turnaround seemed rather counter-intuitive. After all, as the pundits pointed out yesterday and are sure to hammer on today, nothing the Fed Chair said indicated a retreat from any pending rate hike.

In fact, the intentional deletion of the word “patience,” used to describe the Fed’s approach to rate hikes, makes the move guaranteed.

So why all of the market exuberance?

Here’s my take on yesterday’s “Yellen Effect” and what it means for oil…