I’ve decided to stop posting to the Energy Investment Strategies web site and to take the site down eventually.  There are two reasons.   One is that I need to concentrate my efforts on fighting my cancer.  The other is that I think to a large extent my original aims for this site have been accomplished.  The site was started to educate investors about “peak oil”, its implications for potential future energy shortages, related increases in the importance and value of energy-related equities, and ways investors can best participate .  …

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The stock market and the oil market both seem to engender feelings much like summer vacation time when I was a kid.  Kinda boring, not much happening, a time to wander around, allow your attention dwell on whatever news of the day happens to come along and rest your mind before getting back to the “real world” some time around Labor Day.   So we can be distracted by Gov. Sanford’s bazaar behavior, the political drama of health care reform, Berlesconi and his babes, or Wimbledon - all of which are …

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As numerous observers have said of late, the causes of oil’s substantial climb from about $40 to $70 were primarily the weakening dollar and purchases by investors and speculators (if there is a difference) to hedge their inflation fears.  I’ve noted these causes ever since oil broke $50. More recently I offered the view that some fundamental supply and demand pressures may be building on U.S. oil inventory levels due to the combined difficulties of four of America’s five largest suppliers, Mexico, Venezuela, Nigeria, and Canada, to …

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In early February I wrote about the upside potential for Iraqi oil production.  Below is the opposite case as put forward recently by an EIS reader, Nawar Alsaadi, who has first hand insights on the issue.  I think he makes a compelling series of arguments, all of which tend to the conclusion that Iraq is unlikely to provide the world with much more than it’s current 2.2 mb/d of oil, certainly over the next few years and perhaps longer term. Future Iraqi oil production is very important to projecting …

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In February Merrill Lynch analysts issued a report saying that non-OPEC oil production may have already peaked. “In summary, assuming the ongoing recession does not turn into a multi-year event where global oil demand is pushed down structurally for the next five years, the steep decline rates in OPEC and non-OPEC countries alike could put upward pressure again on oil prices as soon as 2010 or 2011.”  Here are two press reports:  Thomson Financial News STOCKS NEWS US-Merrill: Non-OPEC oil production may have peaked02.03.09, 02:25 PM EST …

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Oil and Stocks Advance Further   Oil and stocks seem to have bottomed as I suggested last month.  Since that March 16th post, stocks are up another 8%, a scorchingly hot run on an annualized basis.  Since March 6th the S&P is up over 21%.   Meanwhile the price of oil has risen almost 35% since February 18th, not quite two months ago. More Gains to Come I continue to expect further gains for both stocks and oil - and eventually for natural gas - but each is a different …

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Six month ago - when the world economy looked significantly rosier - I posted an analysis of projected supply and demand for oil going forward to 2015.  The analysis was based on the assumption of continued demand growth, continuing decline of old oil fields and expected new production from announced oil megaprojects.  I adjusted the magaprojects estimates for delays and  I concluded that: “if these estimates are at all closely correlated with reality we should expect oil markets to be tighter than at present through 2012 …

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Recent reports highlight the enormous reserves of oil in Iraq and the potential for them to be exploited in the relatively near term, potentially impacting the onset of Peak Oil.  From an investment viewpoint, I focus on the period ending in 2015, largely discounting whatever might come thereafter.  In that time frame, Iraqi production increases are more limited and political risks are still hard to assess.  That said, one must tentatively conclude from recent events that foreign contracts are likely to be let and production is likely to increase …

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Our current investment trauma marks the end of an era of excesses in credit and real estate markets, of course.  But it also denotes that the United States is undergoing a far more general and significant transition - not only to a new government with a radically different agenda, but more lastingly into a whole new climate for investments. 

Gone is the era of wind-to-the-back investing powered since 1982 by continually lower interest rates and the virtuous influence of the baby boomer demographic bulge working its way through the U.S. economy …

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Energy investing - for me, at least - is mostly on hold.  I do have some mid-stream gas pipeline companies that pay great dividends but little else besides cash.  When will it be time to get back into energy stocks in a core portfolio sense?   Lets work back from the new fundamental realities of oil prices to their implications for energy stock prices.    Before 2003 (except during the politically related oil crises of the 1970’s) there was only one condition in the oil market: plenty of oil.  So oil …

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Two well respected oil analysts, Charles Maxwell and Peter Wells, provide recent updates to their peak oil thoughts.  Wells in particular is interesting because he employs a bottom-up analysis similar to the Megaprojects works that is done on Wikopedia and by Chris Skrebowski.  Wells is also a consultant to Toyota, an impressive credential. Maxwell repeated his prediction of $300 oil in 2015.  Wells thinks non-OPEC production has already peaked, that global production may peak in 2015, and like Maxwell he expects tight oil conditions and thus higher prices …

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As the global economy heads into terra incognita and the stock market tries to prove it has seen the worst my thoughts, for whatever they are worth, are: 1. Some economic observers such as John Thane, the CEO of Merrill Lynch, and JC Penney’s CEO Mike Ullman are saying the current economy is comparable with the Great Depression.   We need fiscal stimulus (since we’re nearly out of gas in terms of monitory stimulation potential).  How much?  If we’re going into a depression the quantity of fiscal stimulus needed …

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The following article published in The Guardian and based on the work of Chris Skrebowski (Peak Oil Consulting) - indicates a crunch in oil supply vs. demand coming in 2012.   It seems clear that the assumption of demand growing at 1.6% per year is now invalidated by the current global recession.  Moreover, supply growth in 2008 and 2009 will be reduced by demand restrictions and will therefore be moved into later years.  But if global growth does resume in 2010 and if geological constraints act more or less …

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The car business is being wrenched into its future by forces beyond its control.  One force is the destruction of demand for its current product offerings because of the bursting of the credit and housing bubbles combined with consumers’ knowledge that rapid technological developments are on the horizon.   This potent combination means consumers who do not absolutely need a new car (the vast plurality of all OECD consumers) don’t need to consider buying one.  Their disposable income and feelings of being wealthy have both been cut off at the knees.  …

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Here is a report on the peak oil presentations at 2008 ASPO in San Francisco.  Jim Buckee of Talisman gave the luncheon address, talking on the production company viewpoint. He differentiated between the volume available in a field, and the production rates that can be achieved at it. He said that Peak Oil is real, and illustrated this conclusion by discussing the decline in production rate from virtually all the major oilfields of the world. 90% of production comes from 10% of the fields and we know …

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