Oil & Energy Investor by Dr. Kent Moors

One Employment Report Does Not a Trend Make

by | published March 12th, 2019

The current oil market is providing us with the latest example of why figures need to be read carefully – especially when it comes to using a single number as a crystal ball with which to provide a prophecy on where oil prices are heading.

On Friday, the U.S. economy posted a dismal rise of only 20,000 new jobs in February, some 160,000 below estimates. Shortly after, West Texas Intermediate (WTI) – the oil benchmark set daily in New York – sank 3%.

Crude oil prices recovered as the day progressed. Nonetheless, at close of trade (2:30 PM for oil), WTI was still down 1.2% for the day. Yesterday, it rebounded and is continuing to move up as I write this on Tuesday morning.

Friday’s figure left market observers scratching their heads.

Those watchers I have talked to over the past several days consider it an outlier, following what has been a better than average employment picture over the past several reports. Yet as it stands, it’s certainly the worst monthly performance in recent memory.

Of course, as happens often, that figure is likely to be revised over the next two months.

But the dismal report still had a major (although, it seems, fleeting) impact on oil traders. And that occasions a simple question:

Does the monthly employment report really tell us anything about where an accurate oil price should be pegged?

A Potential Trade Deal Could Shoot This Industry through the Roof

by | published March 9th, 2019

The U.S. has a history of picking fights. When another country complains about us, I can almost hear everyone else rolling their eyes and saying, “What did they do this time?”

Well, the U.S. and China have been going at it for some time, and the headlines are just as ubiquitous as ever.

These days, however, what we’re hearing about is an anticipated trade deal to cool the fiery tensions between these two global superpowers.

This trade deal would roll back the tariffs that the U.S. implemented on Chinese goods – all $200 billion worth.

In return, the Chinese would retract their own retaliatory tariffs.

This has the potential to cool the waters a bit, and allow the two to regain stability.

While this in itself is a good enough result, there’s another favorable end goal that will be mutually beneficial.

And it involves the production and shipment of liquefied natural gas (LNG).