Making sense of trends and data. Another look at oil prices.

More items related to oil prices

Updated 6.4.2015
Ongoing collation of items related to the oil industry and oil prices. Previously entries in this series are here, here, and here.

Can US fracking companies be the "swing producers" to control market supply?

The Wall Street Journal (WSJ) in an article entitled, "How OPEC Hurt Big Oil," reports on the recent meeting in Vienna between OPEC (Organization of Petroleum Exporting Counties) members, describing it as a counseling session. Big oil company profits are being crushed as the price remains low, but they have been invited to conference too to be counseled… or is that consoled?

However, as noted previously in this series, prices are off their lows, despite the fact that production continues to outstrip demand. US producers have backed off starting new fracking wells for the time being, but for projects having reached production, that oil is being drilled and produced.

The article takes as fact the idea that the Saudis have decided to push the role of "swing producer" onto the hodgepodge of private companies that are shale drillers in the US. This would seem to be a ridiculous notion on its face— these companies can't work together to stabilize the market even if they wanted to (and they do not) because such collusion would be illegal. So the more likely answer is that the Saudis want to destroy the shale oil market, and then will go back to setting oil prices where the kingdom wants them to be.
Read the rest.

A Brief Round Up of Oil news

Updated 6.2.2015
The state of the oil market hasn't been considered in this space in a while, so here's a brief round up of recent oil price news.

Tanker market send bearish signal

Oil prices are off their lows in recent months, but Bloomberg reports that indications from the tanker market are at odds with the oil bull narrative. OPEC is still pumping oil as fast as it can to protect its market share. There is a glut of oil being produced, so much so that a portion of it is now being stored on tankers at sea, which would seem problematic on a number of fronts.

Because the oil has to go somewhere once its out of the ground, the number of super tankers surged, a signal to some that the oil market was healthy. However, if the super tankers are mostly floating storage containers, bullish oil traders have bought into a bad bet. Next month Iraq is supposed to increase its production, though this prediction has been made previously.
Read the rest.

Invest in Himax?

Updated 5.28.2015
The goal is to identify stocks to buy that offer regular, relatively high interest rates. HiMax [Nasdaq:HIMX] pays a dividend with a 4% yield, and so meets the "relatively high" portion of the selection criteria.

Initial concerns

Himax is a fabless semiconductor company based in Taiwan that provides technology for imaging displays. Taiwan is not China, but I need to investigate if Taiwanese companies have the same issues with their financials— issues as in the numbers for companies based in China are not to be believed. A brief google search brings up nothing obvious, as opposed to a similar search for China, where the links are plentiful.

Still as a foreign stock, the amount of information available via the SEC's website is less than if it were a domestic company.
Read the rest.

Why is Verizon Buying AOL?

Updated 5.21.2015
Full disclosure, the author of this piece owns shares in AOL, and has for decades now. For the most part it's been dead money, but the stock is off its lows, and we bought at an early low price. That said, the announcement that Verizon [NYSE:V] was buying AOL [NYSE:AOL] didn't make a whole lot of sense here at LWRAS. Is Verizon trying to become a content provider to skirt the coming Title II regulations?

The purpose here is to round up and review the evidence and background and then analyze this proposed deal.

Throes of a dying dinosaur?

According the Wall Street journal in the article, "Verizon-AOL: A war of All against All," Verizon is buying AOL because owning the pipes isn't as valuable as it used to be, though the Journal blames the iPhone rather than Title II.
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Site Maintenance note

Updated 5.21.2015
The new format for the site is in place, and the decision has been to standardize the entire site to it. This will take time and will occur mostly behind the scenes, but may affect some older links for a bit. As dead links and errors are found, they will be rectified.