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Checking Up On The Energy Crash

FYI: At the end of 2014 after the first crash that oil and the energy sector experienced, we posted the chart below. It’s time for an update. In the chart, we show the drops that the Nasdaq and the S&P Homebuilder index experienced following their peaks in 2000 (for the Nasdaq) and in 2005 (for the homebuilders). We also show the drop that the S&P Oil Exploration and Production index has experienced from its high in June 2014. For the Nasdaq and the Homebuilders, we extend the charts until their respective lows were made. As you can see, the Oil E&P group has experienced a similar drop thus far, the only question now is whether it continues lower like the other two did.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/checking-up-on-the-energy-crash/

Comments


  • Oil falls more than 2 pct after banks cut forecasts
    LONDON | BY LISA BARRINGTON AND CHRISTOPHER JOHNSON(Reuters)
    Oil prices fell more than 2 percent on Friday after Goldman Sachs and Germany's
    Commerzbank both slashed their crude forecasts, citing oversupply and concerns over China's economy.

    Joining a long list of banks cutting price projections, Goldman Sachs on Friday lowered its 2016 forecast for U.S. crude to $45 from $57, and said it saw 2016 Brent prices at $49.50, down from its earlier $62 forecast.

    "The oil market is even more oversupplied than we had expected and we forecast this surplus to persist in 2016," Goldman said in a note entitled "Lower for even longer".

    Investors largely ignored a relatively bullish report from the Paris-based International Energy Agency (IEA).

    The IEA said a move by the world's big oil exporters in OPEC, led by Saudi Arabia, to defend their market share by not reducing production appeared to be working.

    "Oil's price collapse is closing down high-cost production from Eagle Ford in Texas to Russia and the North Sea," the IEA said in its monthly report.

    The agency, which advises the world's biggest economies on energy policy, said reductions in non-OPEC oil production "may result in the loss next year of half a million barrels a day – the biggest decline in 24 years".

    But traders remained bearish.

    "The oil market is looking for something a little more concrete than the forecasts," said Harry Tchilinguirian, global head of commodity strategy at BNP Paribas.

    http://in.reuters.com/article/2015/09/11/markets-oil-idINKCN0RB02S20150911
    http://www.bloomberg.com/quote/CL1:COM

    image
    http://www.gasbuddy.com/Charts

    Initial Guidance | 11 September 2015
    http://www.capitalspectator.com/initial-guidance-11-september-2015/

    Highlights (11 September 2015) International Energy Agency‌ > Oil Market Report > OMR Public
    But until then, inventories are continuing to build with global supply - towering 2.4 mb/d above a year ago - outpacing demand. Our balances show the world only starting to siphon off record-high stocks in the second half of 2016. At that point Iran could be producing more oil, provided sanctions are lifted following implementation of the nuclear pact it secured with the P5+1 group.

    As for demand, the lure of $50/bbl oil is boosting growth to a five-year high of 1.7 mb/d this year and an above-trend 1.4 mb/d in 2016. US motorists are taking to the roads, propelling domestic gasoline demand to an eight-year high. We expect China, the world's second largest oil consumer, to keep up its crude purchases despite the recent stock market collapse, currency devaluation and steady stream of negative macroeconomic news. Beijing could also buy extra crude to fill up its strategic reserves.
    https://www.iea.org/oilmarketreport/omrpublic/


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