Oil and Commodities

Everybody Loves MBS at These Oil Prices

05 September 2022
Remember Jamal Khashoggi. Neither does anyone else with oil over $100. The young Saudi prince is shaking up society in some good ways. Just don't bet on his zillion-dollar pet projects. Barron's, June 2022

Saudis Bank Their Oil Windfall, Offering an Opportunity for Investors

By 

Craig Mellow

June 3, 2022

 

Remember Jamal Khashoggi? Neither, apparently, does the global power elite these days. Crude oil pushing $120 a barrel has expunged concerns about the Saudi Arabian journalist dismembered in 2018, reportedly by minions of Crown Prince Mohammed bin Salman.

French President Emmanuel Macron and United Kingdom Prime Minister Boris Johnson have both trekked to Riyadh to cajole more production from MBS, as the de facto Saudi leader is known. President Joseph Biden may well follow suit this month, while attending a Gulf Cooperation Council summit in the Saudi capital. That would be thanks for Saudi-dominated cartel OPEC+ lifting output targets by 200,000 barrels daily at a June 2 meeting.

 

MBS isn’t just raking in political capital. The kingdom earned $1 billion a day on petroleum in the first quarter of 2022, yielding a $15 billion budget surplus.

 

Russia is a Fertilizer Superpower, Too

05 September 2022
A few companies control world fertilizer supplies. The Ukraine War and sanctions may knock the Russians offline. That is rocking world food prices, and company stocks.

Fertilizer Stocks Have Soared on Putin’s War. Proceed With Caution.

By 

Craig Mellow

Updated March 23, 2022 8:26 am ET

 

Haven’t earned enough on your oil stocks since Russia invaded Ukraine? You should have bought Nutrien , the Western Hemisphere’s top fertilizer producer, based in Saskatoon, Canada. 

Its shares (ticker: NTR.Canada) have climbed 37% in the month since Vladimir Putin launched his “special military operation.” The Energy Select Sector SPDR exchange-traded fund (XLE), a proxy for Big Oil, is up a mere 13%. 

 

As big as Russia is in oil, it’s more critical to global fertilizer markets. Farmers around the world rely on fertilizer derived from three different natural resources: potash, phosphate, and natural gas. Russia and its satellite Belarus produce more than a third of global potash, and of course dominate in natural gas. Belarus’ potash exports were strangled by Western sanctions even before the war. Russia cut its own off by executive order March 4. 

 

Renewable Energy Becomes Cost-Competitive for Business

22 September 2019
Big corporations are opting for greener, and cheaper, energy, But they're a long way from saving the planet.

Global Finance, April 2019

 

Governments around the world may be dawdling in the drive for a greener planet, but private corporations are picking up the pace—at least in switching to renewable energy sources. So-called power purchase agreements (PPAs) for clean electricity more than doubled globally last year, to 13.4 gigawatts (GW), according to a Bloomberg New Energy Finance report. Well-known new-economy consumers like Facebook and Google are joining old-school industrialists like Norsk Hydro and Alcoa in sourcing more solar and wind power. Even oil giant Exxon Mobil contracted for 575 megawatts (MW) of renewables on the windy plains of Texas.

Renewable Energy Becomes Cost-Competitive for Business

22 September 2019
Big corporations are opting for greener, and cheaper, energy, But they're a long way from saving the planet.

Global Finance, April 2019

 

Governments around the world may be dawdling in the drive for a greener planet, but private corporations are picking up the pace—at least in switching to renewable energy sources. So-called power purchase agreements (PPAs) for clean electricity more than doubled globally last year, to 13.4 gigawatts (GW), according to a Bloomberg New Energy Finance report. Well-known new-economy consumers like Facebook and Google are joining old-school industrialists like Norsk Hydro and Alcoa in sourcing more solar and wind power. Even oil giant Exxon Mobil contracted for 575 megawatts (MW) of renewables on the windy plains of Texas.

Where's the Emerging Market Oil Dividend?

30 April 2017
Cheaper oil is supposed to help most EM economies, which import energy. Hasn't happened so far.

Barron’s, May 14, 2016

 

Low oil prices are obviously bad for some emerging markets, such as Russia and Brazil. But they should be good for most of them, including India and China. Crude exporters represent just 20% of the global MSCI Emerging Markets Index, says Marcus Svedberg, chief economist at East Capital in Stockholm.

Markets have ignored this logic, however. Emerging market indexes have plummeted since the great oil crash began in mid-2014, and only started to recover as crude prices rebounded recently. Analysts who waited on an oil dividend for the developing world are giving up hope. “If you haven’t seen it for more than 20 months, you probably won’t see it now,” says John Baffes, who oversees the World Bank’s commodities forecasting. Here’s why:

No Rush to Snap up Distressed Shale Assets

23 January 2016
Oil majors and private equity firms have plenty of powder for shale, but are keeping it dry for now
Exxon's been bitten once in shale already

OCT 20, 2015

Shale oil drillers squeezed by crashing prices and mountainous debt make a tempting target for well-funded private equity and industry investors. “Oil is the biggest investment opportunity in the world,” Stephen Schwarzman, chairman and CEO of top private equity financier Blackstone Group, declared at last winter’s World Economic Forum in Davos, Switzerland.

High Anxiety Over Emerging Market Corporate Debt

23 January 2016
Emerging market debt may hit a crisis again, but this time the problem is companies, not governments
Emerging Market Cities that Debt Built

Institutional Investor,  Oct 22, 2015

 

Emerging-markets debt has reached worrying levels again, but the focus of anxiety is different than it was during the crises of the 1980s and ’90s. Sovereign states have largely heeded the lessons learned from those debacles. Much unlike their developed-world peers, they’ve held debt steady since 2000, at about 40 percent of gross domestic product, according to the Institute of International Finance in Washington.

Iran Can't Just Open the Oil Spigot

23 January 2016
Energy companies won't rush to invest billions in the Islamic Republic

July 18, 2015

The biggest ripple for investors from the landmark July 14 agreement that could free Iran from international economic sanctions in return for curtailing its nuclear program will be felt in the oil markets. They didn’t take the news well. The price of Brent crude fell 2.5%, to $57.06 a barrel, from what was already close to a four-month low, before falling a bit further later in the week.