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House repeals 'Big Oil' tax breaks

It also boosts royalty payments for drilling to $14 billion over 10 years, capping the Democrat's '100 hour agenda.'

January 18 2007: 6:49 PM EST

 

 

WASHINGTON (Reuters) -- The new Democratic-led House Thursday passed legislation aimed at "Big Oil" that would roll back some industry tax breaks and force energy companies to pay more drilling royalties, valued at $14 billion over 10 years.

 

Passage of the bill by a vote of 264-163 capped House Speaker Nancy Pelosi's 100-hour agenda, which also included measures to raise the minimum wage, lower student loan interest rates and bolster homeland security.

 

Special Reportfull coverage

 

House repeals 'Big Oil' tax breaks

Oil tumbles toward $50

Russia plays hardball, and markets take note

Exxon seen warming to emission controls

The $14 billion raised from the additional royalties and repealed tax breaks would fund research for renewable energy sources. The measure still must be approved by the Senate and the president before it becomes law.

 

Going after major integrated U.S. oil firms like Exxon Mobil Corp., Chevron Corp. and ConocoPhillips has been a top priority for the House Democratic leadership, which says they have earned record profits at the expense of U.S. motorists paying high gasoline prices.

 

Oil dips below $50

"The oil and gas industry is extraordinarily well established and well off," said House Democratic leader Steny Hoyer. "It does not need the American taxpayer's help to be successful or to make a dollar."

 

About half of the bill's savings comes from eliminating a lower tax rate on oil companies, which will bring in about $6.5 billion from 2007 to 2016, according to a congressional estimate. The lower tax rate had been given to all U.S. manufacturers in 2004, including oil companies.

 

 

@: http://money.cnn.com/2007/01/18/news/compa...oney_topstories

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HWO.UN (TSX)

 

Another beaten down Canadian oily. Maybe shareholders are concerned that they will convert from a trust or maybe the shares are down expecting lower revenues with lower expectations for drilling activity. In any case the management looks solid and the price looks reasonable to me for the long pull.

 

I bought HWO.UN (High Arctic Energy Services LP) on the TSX yesterday. It is an oil service company in trust format with the last monthly distribution at .0975. Closed yesterday at C$5.44. Plenty of info at the

company website: http://www.higharcticwellcontrol.com/

 

DYOR and DD

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Quite disturbing that American citizens are cheering the idea of the American government confiscating the profits of shareholders of an American company. Maybe they'll take a leaf out of Chavez's book now and nationalise the oil industry.

 

Not quite convinced peak oil is around the corner but I think you are looking at the next major oil crisis right there. Supply constraints as governments around the world nationalise their oil supplies and make a typical socialist mess of trying to meet consumer demand.

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The Energy Information Administration (EIA), the statistical unit of the Department of Energy, said Tuesday it expects lower crude prices in the next two years to combine with moderate economic growth and lead to more petroleum consumption.

 

Citing warmer weather this winter across most of the Northern Hemisphere, the administration again lowered its price projection for West Texas Crude oil, which averaged $44 a barrel in 2006, to $59.50 per barrel in 2007, compared with $64.42 in its forecast last month. The agency also lowered its projection for 2008 to $62.50 from $64.58 in January.

 

http://www.iii.co.uk/news/?type=afxnews&am...;action=article

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chart.gif

 

That usual February dip is when the oil co's run down excess inventories, not needed after the winter,

and when demand falls during "refinery turnarounds" (ie shutting them down for 1-2 weeks and retooling

them to produce gasoline rather than heating oil)

 

Once the february dip is out of the way, crude flies

 

Get some cheap oilies, in these next 2-3 weeks

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chart.gif

 

That usual February dip is when the oil co's run down excess inventories, not needed after the winter,

and when demand falls during "refinery turnarounds" (ie shutting them down for 1-2 weeks and retooling

them to produce gasoline rather than heating oil)

 

Once the february dip is out of the way, crude flies

 

Get some cheap oilies, in these next 2-3 weeks

 

Is it worth novices buying into CRUD (crude etf)?

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Check the motley fool www.fool.co.uk -> discussion boards. I hold Dana Petroleum DNX, Soco SIA (up 50% since I bought) , Aminex AEX (longer term and very risky) and I have a spread bet on Burren. An aim stock (which is currently down 25% since I bought it) is Imperial Energy. Finally there is Faroe Petroleum (down a mere 30% since I bought it).

Check Imperial Energy now (IEC). Just about made up for my losses on Falcon (which I have as a write off now, but you never know).

 

Next one to rocket will be SIA IMO. Not long now.

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Interesting few days in terms of oil.

 

Todays news paints an interesting picture. Oil prices plunged 70 points after this press release.

 

http://www.fxstreet.com/news/forex-news/ar...b2-d9e96a31745e

 

Read that article then consider this - I think the guys at the Opec meeting must have missed this.

 

US DOE Inventories: Crude Oil out at 1180K vs. 2000K exp; Gasoline out at -2486K vs. -2375K exp; Distillate out at -2733K vs. -2075K exp; Refinery Utilization out at -0,23% vs. 0.50% exp.

 

 

Now consider that Oil has dropped 70 points today.

 

Seems like a very good buying opportunity (so i did buy).

 

Is US economic data so weak as to prevent a bounce? Well, I will know by morning one way or another, the indice's look fairly optimistic for tommorow so I think it is good bet

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a nice scalp trade

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IM still learning, in fact I owe much to you and this site, - im slowly building confidence (very cautious). I have certainly learnt a lot over the last 2 - 3 years from HPC where i spotted some of your posts with links to here - greenenergyinvestors.

 

I found this site very useful for learning spread betting www.financial-spread-betting.com and im sure you all know well that here in the UK there is no TAX to pay on winnings.

 

Ive come the conclusion that i can make more through spread betting than i can through property speculating or working 9-5 for someone else, although right now i just dont have time to do it properly. Yesterday was good because i had no work - day off sick, indeed i am seriously considering quitting to focus on spread betting. Im waiting a while so i can show a consistant bet history with a minimum gain of £1000 a week.

 

Currently i get up at 5am to do daily research prior to going to work at 8am - browse the charts to get a feel for things prior to opening for the day, also read the upcoming daily economic events etc.

 

One thing i find very difficult - and that is not being able to see the screen in the afternoon = no closing of positions until after 5pm.

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Two hours after i sold that brent at the day high, the price fell below 6000 so i bought again after which it went back up to 6040 within 25 minutes.

 

Also went short on S&P for another £200 profit.

 

Gold has gained so much on friday ....... im anticipating a big fall in gold next week (so i went short prior to close on Friday).

 

All n all ..... a very good day.

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Ive come the conclusion that i can make more through spread betting than i can through property speculating or working 9-5 for someone else, although right now i just dont have time to do it properly. Yesterday was good because i had no work - day off sick, indeed i am seriously considering quitting to focus on spread betting. Im waiting a while so i can show a consistant bet history with a minimum gain of £1000 a week.

 

Just be careful before you quit your job, because one can easily have a winning streak, and it seems like you have sussed it all out, and then you start having a losing streak. Also, what I have heard from many traders is that if you ahve a certain style of trading, it typically works for a while, and then it stops working and you start making losses. I think you need a consistent sustainable record over several years of making consistent profits from spread betting, before you should consider quitting your day job.

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Rikki,

 

I agree with BP, be careful about assuming it is easy to make a living from this game.

We are all prone to winning and losing streaks, and neither kind lasts forever- that much i have learned.

 

I have been making good money for some years now, but that is mainly due to a bull market in commodities, and the favorable economics of the private placement game, where i big part of my capital is at work.

 

I am delighted to read you are learning plenty, but i dont want people to have unrealistic ideas about the trading game.

 

I think this is a particularly dangerous year, and i am looking to keep a 7-figure sum in cash, or reasonably bullet-proof investments. My recent property investments in HK, are also part of a diversification drive, as i strat to think more about wealth protection, and not just wealth enhancement.

 

I'm also starting develop some charity ideas, which is part of a desire to "give back" something.

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Anyone any idea what the hell happened to crude just as the market closed? Was thinking of entering a short as we $65 which looks good low risk entry from a technical standpoint. Apart from a large amount of "Iran war premium" in the price, the media seems to have forgotten about the existing "Iraq war premium". Likewise, gasoline stocks may be low but US crude inventory supplies are building. I think it looks good for a tumble to $50 or below.

 

However, the sudden spike to $68 in afterhours is bizarre. Can anyone shed some light on it?

 

Chart

 

LATER:

 

Okay, appears there was a rumour after hours about Iran attacking a US warship in the Persian gulf. Whoever starting spreading it is probably sitting pretty on an oil short around the $68 level.

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NATGAS -shows relative strength

 

Oil stocks slide on weaker crude, downgrades

 

SAN FRANCISCO (MarketWatch) -- Oil stocks fell at the open Monday, weighed down by lower crude oil prices and several broker downgrades. In early action, the Amex Oil Index ($XOI : 1,245.58+2.99+0.24%) was off 0.5% and the Philadelphia Oil Service Index ($OSX : 220.69+0.86+0.39%) was down 0.2%. Standard & Poor's downgraded Tesoro (TSO) and Lehman issued valuation downgrades on Murphy Oil Co. (MUR : 53.33-0.54-1.00% ) and Hess Corp. (HES ) . The Amex Natural Gas Index ($XNG : 489.39+3.41+0.70%) bucked the trend, advancing 0.4%. May crude-oil futures were down 81 cents at $63.47 a barrel on the New York Mercantile Exchange.

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my natgas position is my best portfolio performer by a large margin, making up for all the losses elsewhere. The May 07 contract is trading at $7.6. My May 2011 still has backwardation, but I expect that to converge to the near month price as we get closer to the date.

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http://www.telegraph.co.uk/money/main.jhtm...hurricane24.xml

 

Insurers told to expect severe US storm season

 

Hurricane forecasters have warned oilmen, insurers and coastal home-owners to brace themselves for a re-run of the $80bn (£40bn) catastrophe that cut a devastating swathe through the Gulf of Mexico two years ago. Weather watchers put the probability of an "above-normal" hurricane season this year at 75pc.

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