Among Wall Street traders who focus on oil futures contracts, there is an eerie quiet. Crude oil prices had been in freefall for nearly a month, but have suddenly stabilized with West Texas Intermediate Crude, or WTI, hovering in the low $80’s. Does that mean the sell-off has ended and current prices are the “new normal?” A quick summary of Wall Street comments provides a range of opinions: — BMO Securities: “We believe that crude oil prices could remain relatively weak over the balance of the year due to reduced appetite for risk, but forecast US$100/barrel long-run.” — Merrill Lynch:… Read More

Among Wall Street traders who focus on oil futures contracts, there is an eerie quiet. Crude oil prices had been in freefall for nearly a month, but have suddenly stabilized with West Texas Intermediate Crude, or WTI, hovering in the low $80’s. Does that mean the sell-off has ended and current prices are the “new normal?” A quick summary of Wall Street comments provides a range of opinions: — BMO Securities: “We believe that crude oil prices could remain relatively weak over the balance of the year due to reduced appetite for risk, but forecast US$100/barrel long-run.” — Merrill Lynch: “Global oil prices have already come down substantially and we expect a positive demand response coming into next year (pushing WTI back to $90).” — Credit Suisse: oil will slide further into the upper $70’s. — Citigroup: Unless an export ban is lifted, surging U.S. oil production means “WTI could fall to as low as $75.” These analysts also think that Iraq, Iran and Libya have the potential to sharply boost output in 2015, based on the outcome of current conflicts. In other words, oil prices may soon rebound, stay range-bound or fall further. Nobody really knows. What… Read More

Few sectors have been hit as hard this year as agriculture. Record-high crop production and a strong dollar are driving grain prices to multi-year lows. Since April, the price of corn and wheat have both fallen by more than 30%. Shares of companies in the sector performed relatively well over the first half of the year, following the broader market closely, but broke down quickly over the last five months. The Market Vectors Agribusiness ETF (NYSE: MOO) has dropped 6.9% so far this year, with nearly a 10% drop since the July high. Yes,… Read More

Few sectors have been hit as hard this year as agriculture. Record-high crop production and a strong dollar are driving grain prices to multi-year lows. Since April, the price of corn and wheat have both fallen by more than 30%. Shares of companies in the sector performed relatively well over the first half of the year, following the broader market closely, but broke down quickly over the last five months. The Market Vectors Agribusiness ETF (NYSE: MOO) has dropped 6.9% so far this year, with nearly a 10% drop since the July high. Yes, prices have fallen dramatically over the latter half of the year, but it was only two years ago that both corn and wheat hit all-time highs. In 2012, corn prices surged more than 50% in six weeks as drought destroyed production. While lower crop prices have producers sweating it out until next year’s growing season, investors may want to take advantage of lower prices now. That is exactly what one director at an agricultural equipment-maker is doing, increasing her controlling interest to more than a tenth of the company before what could be a boon for… Read More

Growing up I swore to myself that I never wanted to be a rancher or farmer — moving irrigation pipe, caring for cattle, bucking bales of hay — needless to say the work was strenuous. But the older I get, the more I find myself yearning for the back-breaking work and solitude that comes with the gig. Luckily, I still have a close connection to it. Growing up in a tiny village in the northwest, ranching and farming is — next to mining — probably the largest employer. And my father keeps a pulse on the agriculture business, as it… Read More

Growing up I swore to myself that I never wanted to be a rancher or farmer — moving irrigation pipe, caring for cattle, bucking bales of hay — needless to say the work was strenuous. But the older I get, the more I find myself yearning for the back-breaking work and solitude that comes with the gig. Luckily, I still have a close connection to it. Growing up in a tiny village in the northwest, ranching and farming is — next to mining — probably the largest employer. And my father keeps a pulse on the agriculture business, as it directly affects his business. So I do my best to pick his brain about happenings in the agricultural business. And when we recently talked I was particularly interested in what was going on in the corn and wheat sectors. What he told me was exactly what I wanted to hear… Right now, there’s a ton of supply in the corn and wheat markets. Thanks to exceptional growing conditions this year. In its most recent report, the United States Department of Agriculture (USDA) announced corn production came in at a record-high 14.5 billion bushels. And this is how it’s been all… Read More

The market has yet to start talking much about the effect of the Republicans winning a majority in the Senate next month in the midterm elections. While the longer-term effect on stocks based on which party controls Congress is widely debated, there is good reason to believe that a change in power this year could lead to a surge in today’s pick.  Despite the correction in the past few weeks, stocks have been on an amazing run since the market bottomed in 2009. Much of the jump in asset prices is thanks to extremely accommodative Federal Reserve policies, and I… Read More

The market has yet to start talking much about the effect of the Republicans winning a majority in the Senate next month in the midterm elections. While the longer-term effect on stocks based on which party controls Congress is widely debated, there is good reason to believe that a change in power this year could lead to a surge in today’s pick.  Despite the correction in the past few weeks, stocks have been on an amazing run since the market bottomed in 2009. Much of the jump in asset prices is thanks to extremely accommodative Federal Reserve policies, and I would not normally be inclined to bet one way or another on midterm elections. #-ad_banner-#​Except for this year. The market has been so preoccupied with October volatility, Ebola and geopolitical concerns that it hasn’t yet reacted to the possibility that congressional control may be about to change. The Republicans currently hold the House of Representatives with 233 members versus 199 Democrats. The Democrats hold the Senate with 55 seats compared with 45 Republican seats.  Most polls give the Republicans a strong chance at winning the six seats needed to take the Senate. For example, the Senate… Read More

The rapid meltdown in oil prices appears to have caught almost everyone off guard. When I looked at the crude oil market in early October, oil prices (for West Texas Intermediate Crude) had just moved below $90 a barrel. Quite suddenly, we’re approaching the $80 mark, and the shakeout may not an end until we hit the $70 mark. That’s a likely price-point when it will become unprofitable for many oil producers to continue drilling new wells. The price slump is leaving no industry unscathed. Shares of companies in oil services, exploration & production and the refiners are all… Read More

The rapid meltdown in oil prices appears to have caught almost everyone off guard. When I looked at the crude oil market in early October, oil prices (for West Texas Intermediate Crude) had just moved below $90 a barrel. Quite suddenly, we’re approaching the $80 mark, and the shakeout may not an end until we hit the $70 mark. That’s a likely price-point when it will become unprofitable for many oil producers to continue drilling new wells. The price slump is leaving no industry unscathed. Shares of companies in oil services, exploration & production and the refiners are all seeing their shares move lower. Yet it’s that last group that should make you do a double-take. Investors are dumping refinery stocks, even though the broader operating backdrop for these firms is actually improving. Investors now have a chance to profit — before the crowd catches on. The U.S. Output Boom To understand profit margin trends for oil refiners, you need to understand the impact of price differences in the United States — West Texas Intermediate is the benchmark — against the rest of the world, which uses the Brent Crude benchmark. European refineries, which ship gasoline and diesel to… Read More

It’s incredible how quickly things can change in the energy sector. #-ad_banner-#​Just 10 years ago fracking was still uncommon in North America. It took billions of dollars and millions of man hours to perfect the technology and make it economical and scalable. Today, the development of fracking — in tandem with the ability to drill horizontally underground — has enabled the United States to tap into vast oil and gas reserves that were previously inaccessible. In 2010 oil production in the United States had been in a steady decline for… Read More

It’s incredible how quickly things can change in the energy sector. #-ad_banner-#​Just 10 years ago fracking was still uncommon in North America. It took billions of dollars and millions of man hours to perfect the technology and make it economical and scalable. Today, the development of fracking — in tandem with the ability to drill horizontally underground — has enabled the United States to tap into vast oil and gas reserves that were previously inaccessible. In 2010 oil production in the United States had been in a steady decline for close to three decades. But a mere four years later, in the spring of 2014, America officially became the #1 oil producer in the world. Take a look at the incredible reversal in U.S. oil production in just the last four years. Source: U.S. Energy Information Administration That sharp reversal in America’s oil production did not go unnoticed by the global energy community. According to global energy services leader Baker Hughes, the number of fracking rigs used onshore in Europe and the Asia-Pacific region increased 10% in 2013. And… Read More

With the price of West Texas Intermediate crude falling to its lowest levels since June 2012, you might be tempted to think that things couldn’t get any worse for the energy sector. After all, the U.S. energy revolution has just begun and oil production is forecast to increase until 2020 before topping out at 9.6 million barrels per day (bpd), an increase of 48% in daily production from 2012. How bad could things get if the increase in U.S. oil production accounts for 197% of the total increase in global… Read More

With the price of West Texas Intermediate crude falling to its lowest levels since June 2012, you might be tempted to think that things couldn’t get any worse for the energy sector. After all, the U.S. energy revolution has just begun and oil production is forecast to increase until 2020 before topping out at 9.6 million barrels per day (bpd), an increase of 48% in daily production from 2012. How bad could things get if the increase in U.S. oil production accounts for 197% of the total increase in global production? According to the BP Statistical Review of World Energy 2014, the United States booked a production increase of 1.1 million bpd last year. The rest of the world saw production fall by 554,000 bpd, for a net global gain of 557,000 bpd. #-ad_banner-#​But all the good news in energy is assuming that the United States can keep production increasing. Cracks in the shale story are leading some investors to doubt that assumption, making falling oil prices the least of your worries. The Premature Demise Of… Read More

No sector has been more beaten up over the past few weeks than the energy sector.  The selloff has been even more severe north of the border where energy companies have been stuck in a down draft since the end of June. #-ad_banner-#This shouldn’t be a surprise to shareholders of these companies.  If you are going to invest in commodity producers, then you had better be mentally prepared to withstand some serious volatility when, not if, commodity prices take a drop. Case in point: Canadian light oil producer Lightstream Resources Ltd. (OTC: LSTMF), which has had its stock price cut… Read More

No sector has been more beaten up over the past few weeks than the energy sector.  The selloff has been even more severe north of the border where energy companies have been stuck in a down draft since the end of June. #-ad_banner-#This shouldn’t be a surprise to shareholders of these companies.  If you are going to invest in commodity producers, then you had better be mentally prepared to withstand some serious volatility when, not if, commodity prices take a drop. Case in point: Canadian light oil producer Lightstream Resources Ltd. (OTC: LSTMF), which has had its stock price cut in half over the last three months despite the company’s successful makeover of its balance sheet during that time. Entering 2014, Lightstream knew that it had to get its financial house in order. The company’s share price was clearly being hurt by its higher leverage ratio compared to its dividend-paying peers.  To bring its debt-to-cash flow ratio down to a level that is more in line with its peers, Lightstream released a plan to sell $600 million worth of assets by the end of 2015. The markets were skeptical that Lightstream could accomplish this, while also receiving attractive prices for… Read More

When it comes to commodities, you’ll usually find a set of countervailing forces that keep prices at an equilibrium. Yet when it comes to oil, all of the factors behind price swings are heading in the same direction.  As oil prices head lower yet, investors will feel both pain and gain — depending on the make-up of their portfolios. A Perfect Storm For much of the past year, a barrel of West Texas Intermediate Crude fetched around $100 a barrel on the spot market. Yet since late July, a series of factors have conspired to push prices lower:… Read More

When it comes to commodities, you’ll usually find a set of countervailing forces that keep prices at an equilibrium. Yet when it comes to oil, all of the factors behind price swings are heading in the same direction.  As oil prices head lower yet, investors will feel both pain and gain — depending on the make-up of their portfolios. A Perfect Storm For much of the past year, a barrel of West Texas Intermediate Crude fetched around $100 a barrel on the spot market. Yet since late July, a series of factors have conspired to push prices lower: — A rally in the dollar, which tends to push all commodity prices lower. — A further slowing in the European, Japanese and Chinese economies, which crimps demand. — A surge in output in Libya to 800,000 barrels a day, up from 240,000 barrels a day in June amid civil war skirmishes near key oil installations. — An oil production surge in Russia, which is back at peak post-Soviet era levels.  — A rapidly rising output in Kurdistan as new key oil installations come on line. — OPEC’s recent inability to curtail production… Read More

In the early months of President Obama’s first term, there was a great deal of talk about the need to invest in clean energy to reduce our reliance on oil imports and create jobs. Indeed, billions were earmarked for various clean energy initiatives, though those funds mostly have dried up in subsequent years. And it’s not just government spending. As we now know, domestic oil and gas production surged, blunting the move toward a reduction in fossil fuel consumption. That created headwinds for clean energy technologies such as solar and wind, though technology gains have helped these renewable sources of power… Read More

In the early months of President Obama’s first term, there was a great deal of talk about the need to invest in clean energy to reduce our reliance on oil imports and create jobs. Indeed, billions were earmarked for various clean energy initiatives, though those funds mostly have dried up in subsequent years. And it’s not just government spending. As we now know, domestic oil and gas production surged, blunting the move toward a reduction in fossil fuel consumption. That created headwinds for clean energy technologies such as solar and wind, though technology gains have helped these renewable sources of power stay relevant. #-ad_banner-#​One part of the 2009 clean energy playbook — energy efficiency — has drifted away. You can see the current lack of interest in energy efficiency spending by glancing at the income statement of Ameresco (NYSE: AMRC), which helps reduce the energy footprint of office buildings, college campuses and other facilities. Ameresco’s sales soared from $400 million in 2008 to above $700 million by 2011, but have since been in decline. The company’s sales appear stuck in the $550 million to $600 million range these days, and shares have fallen by more than half from their… Read More