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Energy and Capital's Weekend Edition: Oil

Oil's Weakness Won't Hold Back Natural Gas

Written by Keith Kohl
Posted September 26, 2009

Welcome to the Energy and Capital Weekend Edition — our insights from the week in investing and links to our most-read Energy and Capital and sister publication articles.


 

Lately, crude oil prices have felt more like an orchestrated dance. . .

As you can see below, prices have remained steady between $60-$75 per barrel:

Crude Oil Chart 9-26-09

 

Even today, as crude trades around $66 per barrel, the question is whether or not prices can hold. According to Andy Lipow, president of Lipow Oil Associates, as reported in Bloomberg, "Prices, and especially refining margins, will continue to decline next week in light of swelling product inventories in the U.S. and Europe."

The Energy Information Administration's weekly inventory report from this Wednesday showed a 2.8 million barrel increase in U.S. crude oil stocks. That's coming off a nearly 5 million barrel drop from the week before.

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If you're counting, inventories are still 45 million barrels higher, compared to a year ago.

With fuel consumption falling (fuel demand dropped 3.3% to 18.5 million barrels per day), a rally back to $75 doesn't seem likely. Yet even with the bearish news, I still don't see oil falling (and staying) below $60 per barrel.

This time around, oil's weakness isn't holding natural gas back.

It's been a long time coming, but natural gas prices finally broke the $4/Mcf mark. In fact, prices over the last three weeks are up nearly 20%. With the winter months ahead, we could easily see another surge in natural gas prices, especially on the back of any signs of a recovery in industrial demand.

 

Enjoy your weekend,

Keith Kohl

Energy and Capital

 

Below is a look at some of our top stories during the past week from Energy and Capital and a few of our sister publications. Feel free to catch up on the latest news in energy you may have missed. . .

 

Chesapeake Energy Stock: Buy, Sell or Hold — Chesapeake is on the Rise
Wealth Daily Editor Steve Christ gives readers insight regarding a potential upsurge in natural gas, highlighting one stock in particular that he believes will lead the charge.

North Dakota's Recession-Proof Secret: The Second Bakken Rush is On
Investors have one last chance to profit off of the #1 oil play in the country. It's happening right now, in the one place that's thriving — despite today's economic troubles.

Copenhagen Climate Conference: Corporate Leaders Group on Climate Change
Green Chip's Sam Hopkins keeps readers updated on the upcoming climate conference, revealing several investment opportunities being created by the COP-15 summit.

Top Oil Stocks: Finding the Right Oil Plays is Easier than You Think
Energy and Capital Editor Keith Kohl reveals why the big names in oil aren't always the best investments and points readers to where the real profits are being made.

The Student Loan Bubble Bursts: Is this the End of Private Student Loans?
Wealth Daily Editor Ian Cooper explains why the downside risk for student-loan companies is forcing them out of business.

Community Wind Projects: New Wind Co-ops Could Bring Clean Power to All
Editor Kyle Haas discusses how communities are coming together and making a push towards new wind projects.

A123 Systems IPO: Electric Vehicle Battery Company Surges on Debut
Energy and Capital Editor Sam Hopkins gives us a brief introduction to A123 Systems and why the company is taking full advantage of the new stimulus package.

The Economic Stimulus Package: $11.3 Billion for Renewable Energy
Editor Nick Hodge informs readers about a "profit bridge" in the water industry that's beginning to open up. . . and reveals his analysis leading to five stocks that are proving to be wildly successful for investors.

Hydrogen Fuel Cells: The Downfall of Tesla?