Energy Markets

Wouldn’t it be nice if everything you needed to keep up with the market was right there on your phone or tablet? And it would be even handier if the data and stories organized themselves just for you, around topics you care about the most. Such a technology would address a formidable challenge we all face: keeping up with the torrent of market information coming at us from trading platforms, online services, trade publications, you name it. It would pull everything you needed into a single database and then organize information on the fly around whatever topic matters most to you at a point in time. And it would be able to reorganize that information on demand as market data ebbs and flows. Over the past few months, we’ve designed an app that tackles this challenge head-on. Today we are introducing the concept of ClusterX, explaining how it works, and giving you the opportunity to help us roll out our new technology to the RBN blogosphere. Warning: this is a blatant advertorial for our new energy market analytics app.

In 2019, there has been a significant shift in crude oil and natural gas markets. Prices have remained stubbornly low, even when faced with the risk of significant turmoil like the Saudi drone attacks. Investors are far less forgiving, and energy-related equity values continue to lag most other sectors, despite most companies returning more of their earnings to shareholders. Oil and gas producers are focused on their sweetest of sweet spots, wringing every crumb of financial return from their investments. The risk-return equation has changed. All this makes now a good time to examine the strategies and tactics necessary for survival in this challenging phase of the Shale Era. That is especially true for the players who seem to be doing everything right, because some of the worst management mistakes can occur when performance is good.

Crude oil and natural gas prices are back from the abyss, but does that mean the long awaited recovery is underway?  Maybe so.  But maybe not.  Energy markets are fickle, driven by a chain of interactions where one market event triggers another, and then another.  Rusty Braziel’s best-selling book, The Domino Effect, explores 30 such market events, which are represented by dominoes – hence the title of the book.  More dominoes are falling now and still more will fall in years to come.  This book explains the interconnectedness of energy markets through an analysis of energy market fundamentals: prices, flows, infrastructure, value, and economics. And good news for fans of audio books: The Domino Effect is now available on Amazon in Audible format.   Today’s blog, an advertorial for the audio book, highlights what The Domino Effect has to say about what’s going on now.

<p>Energy market volatility in 2015 was neither the result of random market fluctuations nor geopolitical orchestration.&nbsp; The market pressures had been building for years, as one market event triggered another, leading inexorably to the carnage of Q4 2015.&nbsp; In fact, there were thirty such market eve</p>

For nearly two months -- Since late July -- WTI crude oil prices have averaged $45/bbl, never once closing above the $50/bbl mark.  Over the same period, the natural gas price at Henry Hub has averaged $2.70/MMbtu and now languishes $.20/MMbtu lower.  Is this a time to be wallowing in misery and self-pity?  Absolutely not!!  This is the time for midstreamers and producers to reposition their businesses with a laser-like focus on the opportunities that low prices have served up.  There are bargains out there in the oil (and gas) patch.  If producers are in the right locations, with drilling costs much lower than last year, there is good money to be made.  And likewise, opportunities abound for midstreamers to pick up assets at very attractive prices to get that production to market.  But to execute such a strategy, you must have a rock-solid understanding of what is really going on in today’s markets for crude oil, NGLs and natural gas.  Our goal for the upcoming State of the Energy Markets Conference scheduled for October 28, 2015 in Denver, CO is just exactly that - to give you a rock-solid market knowledge based on hard data and thorough analysis.  Today’s blog is an advertorial for the conference.