Hydraulic fracturing, or “fracking”, has become one of the fastest-growing methods for tapping into abundant shale reserves held within the U.S. The process works by pumping fracturing fluids-like slickwater, gel or foam–into a wellbore at a sufficient enough rate to fracture the rocks below. When these fractures occur, the operator injects proppants into the well to prevent the fractures from closing when the fluid pressure is reduced. And finally, oil and gas leak from the fractures into the well for extraction. But the revolutionary process is not without its drawbacks, as many criticize the side effects caused from fracking. Below, we outline the case against fracking and why a number of people have rallied against this rapidly-developing energy extraction method [for more fracking news and analysis subscribe to our free newsletter].
One of the most attractive features of the commodity space is its cyclical returns. While it may make it difficult for long term investors, traders who know the patterns of certain hard assets can often turn a nice profit simply based on the natural price movements of different commodities. Crude oil is no exception to such patterns, as savvy investors have been profiting from the fossil fuel’s trends for years. Though crude has been exhibiting weakness with questions about its long-term future, its short-term seasonal trend may be a ripe opportunity for traders everywhere [for more crude oil news and analysis subscribe to our free newsletter].
Crude oil has been among the worst-performing commodities this year as hefty production has combined with a number of other factors to send the fossil fuel lower. That being said, a number of bellwether oil firms will be detailing their most recent quarter’s earnings this week, as investors are anxious to see how lower prices have impacted bottom-line returns. Below, we outline five of the biggest oil firms to report earnings this week, and commodity investors should watch them closely [for more oil news and analysis subscribe to our free newsletter].
Backwardation and contango are two phenomena that define the futures industry of the commodity world. Though the terms have come handcuffed with a negative connotation, those who understand how they work should not sweat their existence. Backwardation is the process by which near month futures are more expensive than those expiring further into the future, creating a downward sloping curve for future prices over time. Contango, simply, has the opposite impact [for more commodity news and analysis subscribe to our free newsletter].
The U.S. has long dominated crude oil consumption around the world, as the insatiable need for the fossil fuel has long powered the economy. According to EIA estimates, the U.S. gobbles up around 18.9 million barrels of oil each day, or about 7 billion per year, the highest such figures in the world. While the nation may be close to supporting itself in terms of domestic oil production, it still will not change the fact that the U.S. relies more heavily on crude than any other country in the world [for more oil news subscribe to our free newsletter].
In the world of oil and gas investing, big names like Exxon Mobil and Chevron are usually what come to mind, as these mega-companies seem to dominate the industry. There are, however, a small subset of companies that have certainly solidified their place in many investors’ portfolios: independent oil and gas. While the market capitalization of these companies may be small, their attractive returns and growth potential warrant a closer look [for more oil and gas news subscribe to our free newsletter].
Last week, Texas-based independent oil and natural gas explorer Anadarko (APC) announced one of its largest oil discoveries in the Gulf of Mexico. Immediately following the press release, shares of the company, as well as the well’s co-owners ConocoPhillips (COP) and Marathon Oil Corp. (MRO), rallied, prompting many analysts to redraw their estimates for Anadarko. Many have noted that this discovery may very well be a “game changer” for the popular explorer [for more commodity news and analysis subscribe to our free newsletter].