Friday Energy Roundup
I'm dashing this off before my morning meeting, so excuse any typos or omissions...
1) Bolivia won't compensate oil firms
Evo Morales, the country's new president, says he won't pay three European firms after Bolivia's takeover of operations in May.
My take: Well, that's certainly going to encourage foreign invesment in Bolivia, isn't it? NOT! Stay the hell away from Bolivia, and that includes miners.
2) Oil down on lower global demand forecast
Crude prices fall as International Energy Agency says high prices are seen slowing consumption.
the IEA said high prices were having an impact on use and cut its 2006 forecast for demand growth by 220,000 barrels per day to 1.25 million bpd.
My take: Nice to see that prices are FINALLY having an effect on consumption. But let's look at the things that could affect supply: Iraq ... Iran ... Chad ... Venezuela ... Mexico's Cantarell field peaking ... Kuwait peaking ... fall-off in North Sea production continues to steepen. HURRICANES! Nigeria ... hell, militants in Nigeria threatened to destroy a $13 billion natural gas export plant.
It just makes me want to take the IEA by its collective big, fat, greasy, size 56-neck and shout: "What the hell is wrong with you IEA? What are you smoking? We are careening toward a Peak Oil crisis here. Stop covering your asses and be proactive!"
I tell you what we'll do. Let's look at a chart of oil...
1) Bolivia won't compensate oil firms
Evo Morales, the country's new president, says he won't pay three European firms after Bolivia's takeover of operations in May.
My take: Well, that's certainly going to encourage foreign invesment in Bolivia, isn't it? NOT! Stay the hell away from Bolivia, and that includes miners.
2) Oil down on lower global demand forecast
Crude prices fall as International Energy Agency says high prices are seen slowing consumption.
the IEA said high prices were having an impact on use and cut its 2006 forecast for demand growth by 220,000 barrels per day to 1.25 million bpd.
My take: Nice to see that prices are FINALLY having an effect on consumption. But let's look at the things that could affect supply: Iraq ... Iran ... Chad ... Venezuela ... Mexico's Cantarell field peaking ... Kuwait peaking ... fall-off in North Sea production continues to steepen. HURRICANES! Nigeria ... hell, militants in Nigeria threatened to destroy a $13 billion natural gas export plant.
It just makes me want to take the IEA by its collective big, fat, greasy, size 56-neck and shout: "What the hell is wrong with you IEA? What are you smoking? We are careening toward a Peak Oil crisis here. Stop covering your asses and be proactive!"
I tell you what we'll do. Let's look at a chart of oil...
Does that look bearish to you? Do you notice how crude oil has been hugging the top of the Bollinger Band and, even when it pulls back, hasn't been able to touch the bottom Bollinger Band since freakin' February? BULLISH!
Yes, oil is in a short term downtrend since peaking in April. Enjoy it. When the next breakout comes, it will likely be to the upside. My intermediate term target for oil is $88 a barrel. And it could go much higher if hurricanes slam into the Gulf of Mexico.
UPDATE: 200 Feared Dead in Nigeria Oil Blast. I'm not an expert and I'm not on the ground at the scene (good thing, otherwise I'd be dead), but I'd say that pipeline will be out of commission for awhile.
Check out my new gold and energy blog at MoneyAndMarkets.com
posted by Sean Brodrick @ 8:51 AM
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