What To Do With Gold?

Why we still like gold? Udo Sutterluety, Sunares Natural Resources Funds. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#192996 Смотрите Dukascopy TV на вашем языке: http://www.youtube.com/user/dukascopytvrussian 用您的语言观看杜高斯贝电视: http://www.youtube.com/user/dukascopytvchinese Miren Dukascopy TV en su idioma: http://www.youtube.com/user/dukascopytvspanish Schauen Sie Dukascopy TV in Ihrer Sprache: http://www.youtube.com/user/dukascopytvgerman Regardez la Dukascopy TV […]

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Time To Jump Into Energy?

Thoughts about oil, gas, natural gas and energy. Time to buy? Udo Sutterluety, Sunares Natural Resources Funds. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#192037 Смотрите Dukascopy TV на вашем языке: http://www.youtube.com/user/dukascopytvrussian 用您的语言观看杜高斯贝电视: http://www.youtube.com/user/dukascopytvchinese Miren Dukascopy TV en su idioma: http://www.youtube.com/user/dukascopytvspanish Schauen Sie Dukascopy TV in Ihrer […]

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Silver More Shiny Than Gold

Silver shines bright – physical cornering ahead? Udo Sutterluety, Sunares Natural Resources Funds. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#192466 Смотрите Dukascopy TV на вашем языке: http://www.youtube.com/user/dukascopytvrussian 用您的语言观看杜高斯贝电视: http://www.youtube.com/user/dukascopytvchinese Miren Dukascopy TV en su idioma: http://www.youtube.com/user/dukascopytvspanish Schauen Sie Dukascopy TV in Ihrer Sprache: http://www.youtube.com/user/dukascopytvgerman Regardez la […]

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Oil India Limited

Historical performance and chart data for Oil India Limited Chart Data is delayed until EOD on this exchange

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This Weeks Market Forecast – SPX, Oil, Gold & Bonds

GET THIS VIDEO EVERY DAY BEFORE THE MARKET OPENS – CLICK HERE Related Posts:Video market update for April 05, 2024 April 7, 2024 Potential for the further drop on NAS100 ….The material has…Forecast for EUR/USD pair on April 5, 2024 April 7, 2024 The EUR/USD pair on Thursday rose to the corrective level…Can Q1 earnings […]

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Silver Mining In Mexico

The leading miner Fresnillo holding 56% with MAG Silver holding the remaining 44% and the project is fully funded into commercial production, Jochen Staiger, CEO & Founder, Swiss Resource Capital AG. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#188144 Смотрите Dukascopy TV на вашем языке: http://www.youtube.com/user/dukascopytvrussian 用您的语言观看杜高斯贝电视: […]

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Nevada Mining Production News

New mining after redevelopment shall start in Q1-2017 with a profitable annual production of 75,000 ounces gold at cash cost of 759 USD/ounce gold and an IRR of 41.5%, Jochen Staiger, CEO & Founder, Swiss Resource Capital AG. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#188151 Смотрите […]

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World Mining News

Good news from the mining world including Brazil Resources with a new resource estimate for the their Alaska properties and Endeavour Silver buying their 4th production site El Compas from Oro Silver Resources, Jochen Staiger, CEO & Founder, Swiss Resource Capital AG. You can view this video and the full video archive on the Dukascopy […]

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This 5,000 Year Low Is Ruining Your Retirement

By Justin Spittler

The global banking system, and your financial future, are at serious risk right now. To understand why, just look at what’s going on with the government’s latest radical policy. Regular Dispatch readers know we’re talking about rock bottom interest rates. According to MarketWatch, global interest rates are at the lowest level in 5,000 years. Credit is cheaper right now than at any point since the First Dynasty of ancient Egypt, around the 32nd century BC. Today, we’ll explain what this means and how to protect yourself going forward..…

Interest rates didn’t get this low “naturally.” They’re at record lows because central bankers put them there..…
In 2008, the Federal Reserve dropped its key rate to near zero to fight the financial crisis. It’s kept rates there for eight years to encourage borrowing and spending. Other major central banks did the same thing. According to MarketWatch, there have been more than 650 rate cuts since September 2008. Rates in Canada and England are also near zero. In Europe and Japan, rates are below zero.

As we’ve explained before, negative interest rates basically tax your bank account. Instead of earning interest on the money in your bank account, you pay the bank. Not long ago, negative rates were unheard of. Today, more than $12 trillion worth of government bonds pay negative rates, up from $6 trillion in February. 

They’ve even seeped into the corporate debt market. According to Bloomberg Business, more than $300 billion worth of corporate bonds now “tax” bondholders. Central bankers told us low and negative rates would “stimulate” the economy. But, as you’re about to see, they’ve done far more harm than good.

Central bankers made it much harder to retire..…
That’s because rock bottom rates don’t just make it cheap to borrow money. They make it tough to earn a decent return. From 1962 to 2007, a U.S. 10 year Treasury paid an average annual interest rate of 7.0%. Today, a U.S. 10 year Treasury yields just 1.5%, an all time low. It’s the same story around the world. Last week, 10 year bonds in Ireland, England, Germany, France, and Japan all fell to record lows. In Japan, you actually have to pay the government 0.23% every year you own one of its 10 year bonds.

This is a serious problem for hundreds of millions of people. For decades, retirees could earn a safe, decent return owning these bonds. Some folks even lived off the interest they earned from these bonds. These days, you have to own riskier assets like stocks to have any shot at a decent return. Central bankers have effectively forced retirees to gamble with their life savings. Rock bottom rates are a serious threat to major financial institutions too.

According to U.S. banking giant Citigroup (C), low and negative rates are “poison” to the global financial system..…
They could make pension funds, insurance companies, and banks “no longer viable in the long term.” Business Insider reported last week:

As Citi notes: “Viability in its strong sense means profitability (a rate of return on equity at least equal to the cost of capital). In its weak sense, viability means solvency.” Basically, Citi is warning that the negative rates may stop institutions being able to make money, which in turn would hit their ability to pay out on things like pensions and insurance policies.

This is a major risk even if you don’t have a pension or life insurance policy. That’s because pension and insurance companies oversee trillions of dollars. They’re pillars of the global financial system…and negative rates are destroying them.

Rock bottom rates could also put some of the world’s biggest banks out of business..…
You see, banks earn most of their money making loans. When rates are high, they make more on each loan. When rates are at record lows, like they are today, banks often lose money. Business Insider explains how today’s record-low rates are starving banks of income:

Citi points out that: “Banks in large part live off the differentials between lending and borrowing rates or between investment returns and funding rates.” Persistently low interest rates could hit these differentials, lowering profitability and seriously harming banks in the long run.

Profits at America’s four biggest banks fell by an average of 13% during the first quarter…
This group includes Citigroup, Wells Fargo (WFC), Bank of America (BAC), and JPMorgan Chase & Co. (JPM). European banks are doing even worse. Swiss bank UBS’s (UBS) profits plunged 64% during the first quarter. Profits at Deutsche Bank (DB), Germany’s biggest lender, fell 58%. Spanish banking giant BBVA’s (BBVA) earnings fell 54%. The CEO of Deutsche Bank warned last month:

In the banking world, we are currently struggling with negative interest rates.
We will struggle more as the effect of those negative interest rates plays out into our deposit books.

Dispatch readers know some of Europe’s most important financial institutions are looking for ways to get around negative rates..…
Commerzbank, one of Germany’s largest banks, said last month that it was thinking of pulling money out of Europe’s banking system to avoid paying negative rates. Other banks have started making riskier loans and buying riskier assets to offset rock-bottom rates. The Financial Times reported in March:

Gonzalo Gortázar, chief executive at Spain’s Caixabank, expressed concerns about a build up of risk in the banking system as a whole. “In a world of low or negative interest rates, that is a possible consequence; you could see banks taking more risk,” he said.

Longtime readers know excessive risk-taking by banks contributed to the 2008 financial crisis. As a result, the S&P 500 plunged 57% from 2007 to 2009. And the U.S. entered its worst economic downturn since the Great Depression.

Bank stocks are already trading like a financial crisis has begun..…
Swiss bank Credit Suisse (CS) has plummeted 63% over the past year. Deutsche Bank is down 60%. Royal Bank of Scotland (RBS) is down 59%. Mitsubishi UFJ Financial Group (MTU), Japan’s biggest bank, is down 39%. These are huge drops in short periods. Remember, these are some of the most important financial institutions on the planet.

We encourage you to take action now..…
Our first recommendation is to avoid bank stocks. Low and negative rates are eating these companies alive right now. And it could be years before governments abandon these failed policies. According to Fed Chair Janet Yellen, low interest rates are the “new normal.” We also encourage you to own physical gold. As we like to remind readers, gold is real money. It’s preserved wealth for centuries because it has a rare set of characteristics: It’s durable, easy to transport, and easily divisible. A gold coin is valuable anywhere in the world.

This year, gold has jumped 26%. It’s trading at its highest price in two years. But Casey Research founder Doug Casey says this rally is just getting started. According to Doug, gold could soar 500% or more in the coming years. If you’re nervous that central bankers will take this interest rate experiment too far, own gold. It’s the best way to protect yourself from desperate governments.

We also encourage you to watch this short presentation. It explains how these failed monetary policies could spark something much worse than a banking crisis. As you’ll see, this is a threat to you even if you don’t a have a single penny in the stock market. Click here to watch this free video.

Chart of the Day

Deutsche Bank is trading like a financial crisis has begun. Today’s chart shows the performance of the German banking giant. You can see its stock is down more than 50% over the past year. Last Thursday, it hit it a new record low. Like other European lenders, low rates are killing Deutsche Bank. Last year, the company lost $7.5 billion. It was its first annual loss since the 2008 financial crisis. And yet, its plunging stock suggests more bad results are on the way.

According to the International Monetary Fund (IMF), Deutsche Bank is the world’s riskiest financial institution. That’s a problem even if you don’t keep money with Deutsche Bank or own its shares. The Wall Street Journal reported last week:

The IMF also said the German banking system poses a higher degree of possible outward contagion compared with the risks it poses internally. “In particular, Germany, France, the U.K. and the U.S. have the highest degree of outward spillovers as measured by the average percentage of capital loss of other banking systems due to banking sector shock in the source country,” the IMF added.

In other words, problems at Deutsche Bank could spread to other banks around the world. It’s another reason why you should avoid bank stocks and own gold right now.

The article This 5,000-Year Low Is Ruining Your Retirement was originally published at caseyresearch.com.

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Global macro overview for 29/06/2016

Global macro analysis for 29/06/2016: The Crude Oil Inventories data are scheduled for release today at 02:30pm GMT and market participants expect the US stockpiles to drain even more than the last time. The expected figures are still negative: -2500k vs. -918k prior, so it means the inventories are now being drained for another week […]

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Crude Oil Technical Analysis for June 28, 2016.

Technical outlook and chart setups: Crude oil has already resumed its downtrend, possibly wave 5, which is setting up for a drop below 26.00 levels going forward. The journey has begun from 51.50 levels, and the price is now trading around 47.50 levels, after hitting fresh lows at 45.80 earlier. Please note that this counter-trend […]

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Gold. Q1-2016 Results

Klondex Mines reported again good Q1-2016 results and is full on track to meet production guidance, Jochen Staiger, CEO, Swiss Resource Capital AG. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#187011 Смотрите Dukascopy TV на вашем языке: http://www.youtube.com/user/dukascopytvrussian 用您的语言观看杜高斯贝电视: http://www.youtube.com/user/dukascopytvchinese Miren Dukascopy TV en su idioma: http://www.youtube.com/user/dukascopytvspanish […]

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New Copper Production

Altona Mining and SRIG from China signed a 240 Mio. US$ deal to bring the Little Eva mine in production by 2019, Jochen Staiger, CEO & Founder, Swiss Resource Capital AG. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#187229 Смотрите Dukascopy TV на вашем языке: http://www.youtube.com/user/dukascopytvrussian 用您的语言观看杜高斯贝电视: […]

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Brazil Resources. Gold

Brazil Resources acquires advanced gold projects and bought in the last 3 years 5 resource projects in Brazil and Alaska, Jochen Staiger, CEO, Swiss Resource Capital AG. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#187004 Смотрите Dukascopy TV на вашем языке: http://www.youtube.com/user/dukascopytvrussian 用您的语言观看杜高斯贝电视: http://www.youtube.com/user/dukascopytvchinese Miren Dukascopy TV […]

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Gold. Negative Interest Rates

Negative interest rates are now normal in the world of sovereign debt with over 51% of all real interest rates are negative of the sovereign debt in the world, Jochen Staiger, CEO, Swiss Resource Capital AG. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#186999 Смотрите Dukascopy TV […]

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Mining News. Silver

Endeavour Silver is in the mood to finance another 40 Mio. $ for their future growth. The production is generating positive cash flow and the company is working on their 4th mine Terronera and just bought into Oro Silver with the El Campo project which should become the 5th mine and production site then. Jochen […]

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LIGHT SWEET CRUDE OIL CFD Live Price Chart

Related Posts:Technical Analysis of Intraday Price Movement of AUD/JPY… November 8, 2023 With a price movement which is above its EMA 200…Technical Analysis of Daily Price Movement of Crude Oil… November 8, 2023 On the daily chart of Crude Oil commodity asset, there…Analysis of Gold for November 07, 2023 – Key support on the… November […]

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If You’re Thinking About Investing in Oil Stocks…Read This First

By Justin Spittler

Is it safe to buy oil stocks yet? If you’ve been reading the Dispatch, you know the price of oil has plunged more than 70% since June 2014. Thanks to a massive surge in production, oil hit its lowest price since 2003 earlier this year. New extraction methods like fracking made the production surge possible. Last year, global oil production hit an all time high. Since then, companies have been pumping far more oil than the world consumes.

America’s largest oil companies lost $67 billion last year..…
Falling profits caused oil stocks to plunge. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP), a fund that tracks major U.S. oil producers, has dropped 72% over the past two years. The VanEck Vectors Oil Services ETF (OIH), which tracks major oil services companies, has fallen 57% since 2014. Oil services companies sell “picks and shovels” to oil producers. However, oil stocks have showed signs of bottoming out in the past few months. XOP is up 57% since January, while OIH is up 45% in the same period.

Oil companies have cut spending to the bone..…
They’ve abandoned ambitious projects. They’ve cut back on buying new machinery and equipment. Some have even stopped paying dividendsFor many companies, spending less wasn’t enough. Global oil companies have laid off more than 250,000 workers since 2014. Companies have also sold parts of their business to raise cash.

In March, Royal Dutch Shell (RDS.A) announced plans to sell $30 billion worth of assets. Shell is the third biggest oil company on the planet. According to Oilprice, Shell’s huge sale could include oil pipelines in the United States. In April, Marathon Oil (MRO), one of the largest U.S. shale oil producers, said it plans to sell about $1 billion worth of assets. Both companies have no choice but to get leaner. Shell’s profits plummeted 80% last year. Marathon lost $2.2 billion in 2015. It was the biggest annual loss in the company’s history.

Many companies have sold oil assets in North Dakota..…
As you may know, North Dakota was ground zero of America’s shale oil boom. From 2009 to 2014, the state’s oil production surged 554%. It became the country’s second biggest oil producing state after Texas.
North Dakota’s booming oil economy attracted more than 80,000 workers. It became the fastest-growing state in the country. Then, oil prices plunged.

North Dakota’s oil production has fallen 10% over the last 18 months..…
And it’s likely to keep falling. According to The Wall Street Journal, more than 2,000 oil wells in North Dakota haven’t pumped a drop of oil in over a year. That’s the highest number of idle wells in over a decade. Many oil companies in North Dakota are burning through cash right now. They’re under distress, and they’re selling assets at deep discounts to pay the bills.

Last week, The Wall Street Journal reported that this has attracted opportunistic investors:

The vultures are descending on North Dakota…
Hundreds of wells have changed hands or are in the process of being sold, state figures show, to a grab bag of fortune seekers ranging from industry experts to first-time wildcatters. They are picking up properties as more established producers scale back or shed assets to pay creditors.

According to The Wall Street Journal, some of these opportunistic investors are Wall Street veterans:

Houston-based Lime Rock Resources, founded by a former Goldman Sachs Group Inc. banker and an oil-industry veteran, bought more than 340 North Dakota wells from Occidental Petroleum Corp. in November. The firm says it has at least $1.6 billion in private-equity money to invest, a portion of which it has spent on the Bakken. In another pairing of Wall Street and oil-patch veterans, NP Resources LLC bought 53 wells from Whiting Petroleum Corp. in December and is looking for more Bakken acreage.

This is a prime example of “crisis investing.” Regular readers are familiar with this strategy. As you’ve probably heard us say, crisis investing is one of the world’s most powerful wealth building secrets. In short, crisis investing involves going against the crowd to buy beaten down assets that have been left for dead. You can often use this strategy to buy a dollar’s worth of assets for pennies. The good news is that you don’t need to step foot in North Dakota to crisis invest in the oil market. Anyone with a brokerage account can turn the oil crash into a money making opportunity.

As we said earlier, many oil stocks are showing signs of bottoming..…
Lots of big oil companies, like Devon Energy Corporation (DVN) and Continental Resources, Inc (CLR), are up 50% or more off their lows. That’s because oil prices have jumped 89% since January. Last week, oil prices closed above $50 for the first time since July. These big swings are typical for oil. Like most commodities, oil is cyclical, meaning it goes through big booms and busts.

It’s impossible to know for sure if oil prices have bottomed. Time will tell if oil’s recent jump is the start of new bull market. But we do know that many oil stocks are trading at their best prices in years. And because the world still runs on oil, it’s smart to go “bargain hunting” for great oil stocks today.

If you’re buying oil stocks, stick to the elite companies..…
We look for a companies that can 1) make money at low oil prices. We also like companies with 2) healthy margins 3) plenty of cash and 4) little debt. In March, Nick Giambruno, editor of Crisis Investing, recommended an oil company that checks all of these boxes. It has a rock solid balance sheet…some of the industry’s highest profit margins…and “trophy assets” in America’s richest oil fields. Most importantly, it can make money at as low as $35 oil.

Like the “vultures” that descended on North Dakota, Nick used the oil meltdown as an opportunity to buy this world class oil company at a huge discount. He bought the stock just weeks after it hit a three year low. Since then, the stock has gained 10%. But Nick says it could go much higher. After all, it’s still down 30% since June 2014. You can access the name of this stock with a subscription to Crisis Investing, which you can learn more about right here.

By clicking this link, you’ll also hear about the biggest crisis on Nick’s radar. Every American needs to prepare for this coming crisis. By the end of this video, you’ll know how to protect yourself AND make money in its aftermath. Click here to watch this free video.

Chart of the Day

The oil surplus is shrinking..…
Today’s chart shows the price of oil going back to the start of 2014. As we said earlier, the price of oil has nearly doubled since January. But you can see that it’s still about half of what it was two years ago.
Oil prices are still low for a couple reasons. One, the global economy is slowing. As Dispatch readers know, the U.S., Europe, Japan, and China are all growing at their slowest rates in decades.

Secondly, the world still has too much oil. According to the Financial Times, oil companies are producing 800,000 more barrels of oil a day than the world consumes. In February, the global surplus stood at about 1.5 million barrels a day. The surplus has come down because oil companies are pumping less oil. But that’s not the only reason the global oil surplus has shrunk. On Monday, Bloomberg Business said the industry has also been hit by major “disruptions”:

Outages also have taken their toll on supply, with global disruptions reaching an average 3.6 million barrels a day last month, the most since the Energy Information Administration began tracking them in 2011. Fires that began early May in Alberta took out an average 800,000 barrels of Canadian supply last month, while Nigerian crude output dropped to the lowest in 27 years as militants increased attacks on pipelines in the Niger River delta.

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Stock & ETF Trading Signals

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Uranium Production Ahead

Uranium Energy Corp. holds a large portfolio of 20 projects in 5 US states and in Paraguay, Jochen Staiger, CEO & Founder, Swiss Resource Capital AG. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#185549 Смотрите Dukascopy TV на вашем языке: http://www.youtube.com/user/dukascopytvrussian 用您的语言观看杜高斯贝电视: http://www.youtube.com/user/dukascopytvchinese Miren Dukascopy TV en […]

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Brexit. The Future Of The EU

Official ‘Out’ campaign in the UK’s EU membership referendum gives the case for the UK to leave the EU by focusing on Europe, Matthew Elliott, CEO, Vote Leave You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#183689 Смотрите Dukascopy TV на вашем языке: http://www.youtube.com/user/dukascopytvrussian 用您的语言观看杜高斯贝电视: http://www.youtube.com/user/dukascopytvchinese Miren Dukascopy […]

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Oil, Gas, Mining or Gold?

Sector selection and companies in oil, gas, mining or gold? Dr. Torsten Dennin, Tiberius Asset Management AG. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#184466 Смотрите Dukascopy TV на вашем языке: http://www.youtube.com/user/dukascopytvrussian 用您的语言观看杜高斯贝电视: http://www.youtube.com/user/dukascopytvchinese Miren Dukascopy TV en su idioma: http://www.youtube.com/user/dukascopytvspanish Schauen Sie Dukascopy TV in Ihrer […]

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Outlook For Crude Oil

The future development of crude oil. Dr. Torsten Dennin, Tiberius Asset Management AG. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#184392 Смотрите Dukascopy TV на вашем языке: http://www.youtube.com/user/dukascopytvrussian 用您的语言观看杜高斯贝电视: http://www.youtube.com/user/dukascopytvchinese Miren Dukascopy TV en su idioma: http://www.youtube.com/user/dukascopytvspanish Schauen Sie Dukascopy TV in Ihrer Sprache: http://www.youtube.com/user/dukascopytvgerman Regardez la […]

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John’s Short-Term Low-Risk Set Ups for Volatile Markets

Our trading partners at Simpler Options are back with another free webinar. This time it’s “Precise Short Term Options Setups for Low Risk Profits in Volatile Markets” hosted by John Carter and Chris Belcher.

As always John and Chris have provided a free video to give you some hints as to what we will be covering….Watch that video now!

It all starts this Tuesday June 7th at 7:00 pm central.

Just visit this link to reserve your seat for this game changing webinar right now since all of these webinars get over subscribed.

Watch Todays Video and Sign Up for the Webinar Right Here

These two highly respected traders (with more than 50 years of combined experience) reveal low risk option strategies designed to catch quick explosive moves in volatile stocks. Get ready to take notes because we’re going to review results from actual live trades executed in real time during current market conditions.

Red Thumb Trades: Stop wasting time (and precious capital) on dud stocks. Discover how to find the right options to trade on the right stocks today.

Precision Exit Strategies: Finally know when to take fast profits intraday and when to let your position turn into a swing trade so you can get maximum gains.

Simple Option Setups: Cut through all the jargon and ‘Greek’ mumbo jumbo and learn how to follow a step by step process to create consistent income trading stock options.

The Ultimate Timing Secret: How to know in advance which stocks are likely to explode (in any time frame) and when to jump in with confidence

Miracle Grow Positions: Simple rapid growth strategies for small accounts. Discover why it’s possible to make a whole lot more money with options than you can with trading stocks. The key is to follow a few precise option setups.

Massive Mistakes Exposed: Learn why most traders will never be consistently profitable and discover how to actually profit from the most common (and costly) mistakes.

The Perfect Storm: Why the current volatile conditions are a trader’s paradise, and key catalysts to watch for in the coming months.

Case Study: Review one of John’s live trades on TSLA that brought in $17k in 1 day (along with several other recent real money examples so you can see these setups in action).

As always, make sure you get your reserved seat now while you and make sure you log in early on Tuesday so you don’t lose your spot.

Reserve Seat Right Here and Now

See you Tuesday evening,
Ray C. Parrish
aka the Crude Oil Trader

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Hundreds of Oil Stocks Could Go to Zero…Will You Still Be Owning One of Them?

By Justin Spittler

The largest shale oil bankruptcy in years just happened. If you own oil stocks, you’ll want to read today’s essay very closely. Because there’s a good chance hundreds more oil companies will go bankrupt soon. As you probably know, the oil market is a disaster. The price of oil has plunged 75% since 2014. In February, oil hit its lowest level since 2003.

Oil crashed for a simple reason: There’s too much of it. New methods like “fracking” have led to a huge spike in global oil production. Today, oil companies pump about 1 million more barrels a day than the world uses.

Last year, America’s biggest oil companies lost $67 billion..…

To offset low prices, oil companies have slashed spending by 60% over the past two years. They’ve laid off more than 120,000 workers. They’ve sold assets and abandoned projects. Some have even cut their prized dividends.

For many oil companies, deep spending cuts weren’t enough…

The number of bankruptcies in the oil industry has skyrocketed….

Bloomberg Business reported earlier this month:

Since the start of 2015, 130 North American oil and gas producers and service companies have filed for bankruptcy owing almost $44 billion, according to law firm Haynes & Boone.

And that doesn’t even include two “big name” bankruptcies in the last couple weeks. Two weeks ago, Linn Energy filed for bankruptcy, making it the largest shale oil bankruptcy since 2014. It owes lenders $8.3 billion.

A week later, SandRidge Energy declared bankruptcy. It became the second biggest shale oil company to go bankrupt. The company owes its lenders about $4.1 billion. Ultra Petroleum, Penn Virginia, Breitburn Energy, and Halcón Resources also filed for bankruptcy in the past couple weeks.

Hundreds more oil companies could go bankrupt this year..…

The Wall Street Journal reported last week:

This year, 175 oil and gas producers around the world are in danger of declaring bankruptcy, and the situation is nearly as dire for another 160 companies, many in the U.S., according to a report from Deloitte’s energy consultants.

Defaults by oil and gas companies are already skyrocketing. The Wall Street Journal continues:

Oil and gas companies this year have defaulted on $26 billion, according to Fitch Ratings data. That figure already surpasses the total for 2015, $17.5 billion.

Fitch, one of the nation’s largest credit agencies, expects 11% of U.S. energy bonds to default this year. That would be the highest default rate for the energy sector since 1999.

Many investors thought the oil crisis was over..…

That’s because the price of oil has surged 80% since February. Dispatch readers know better. For months, we’ve been warning there would be more bankruptcies and defaults. We said many oil companies need $50 oil to make money. The price of oil hasn’t topped $50 a barrel since last July. Even after its big rally, oil still trades for about half of what it did two years ago.

Oil prices will stay low as long as there’s too much oil..…

Although the world still has too much oil, the surplus has shrunk in the past few months. In February, the global economy was oversupplied by about 1.7 million barrels a day. Thanks to U.S. production cuts, the surplus is now just 1.0 million barrels a day. The number of rigs actively looking for oil in the U.S. has dropped by 80% since October. This month, the U.S. oil rig count hit its lowest level in 70 years.

However, many other countries aren’t cutting production at all. Saudi Arabia and Russia, two of the world’s biggest oil-producing countries, are both pumping near-record amounts of oil. Frankly, these countries don’t have much choice. Oil sales account for 77% of Saudi Arabia’s economy. And oil accounts for 50% of Russia’s exports. If these countries stop pumping oil, their economies could collapse.

Low prices have made it impossible for some oil companies to pay their debts..…

U.S. oil companies borrowed nearly $200 billion between 2010 and 2014. If you’ve been reading the Dispatch, you know the Federal Reserve is mostly to blame for this. It’s held its key interest rate near zero since 2008. This made it incredibly cheap to borrow money. When oil prices were high, the debt wasn’t an issue. Companies made enough money to pay the bills. That’s no longer the case. Today, many oil companies are burning through cash to pay their debts.

To make matters worse, many weak oil companies have been cut off from the credit market..…

Before prices collapsed, oil companies could refinance their debt if they ran into trouble. This could buy them time to sort out their problems. These days, many banks will no longer lend oil companies money. Bloomberg Business reported last month:

Almost two years into the worst oil bust in a generation, lenders including JPMorgan Chase & Co., Wells Fargo & Co. and Bank of America Corp. are slashing credit lines for struggling energy companies…
Since the start of 2016 lenders have yanked $5.6 billion of credit from 36 oil and gas producers, a reduction of 12 percent, making this the most severe retreat since crude began tumbling in mid-2014.

Oil stocks are still very risky..…

But that doesn’t mean you should avoid them entirely. As we’ve said before, oil stocks have likely entered a new phase. You see, when oil prices first tanked, investors sold oil stocks indiscriminately. Both strong and weak stocks plunged. In other words, investors “threw the baby out with the bath water.” You often see this behavior during a crisis.

Exxon Mobil (XOM), the world’s biggest oil company, fell 34% since 2014. Chevron (CVX), the world’s second biggest, dropped 48%. Now that oil has stabilized, the stronger companies are separating themselves from the weaker companies. This year, Exxon is up 15%. Chevron is up 11%. The crash in oil prices has given us a chance to buy world class oil companies at deep bargains.

If you want to own oil stocks, stick with the best companies..…

If you’re going to invest in the sector, there are four key things to look for: 

Make sure you buy companies that can 1) make money at low oil prices. You should also look for companies with 2) healthy margins 3) plenty of cash and 4) little debt.

In March, Crisis Investing editor Nick Giambruno recommended a company that hits all of these checkmarks. It has a rock-solid balance sheet…some of the industry’s best profit margins…and “trophy assets” in America’s richest oil regions. It can even make money with oil as cheap as $35.

The stock is up 9% in two months. But Nick thinks it could just be getting started. After all, it’s still 30% below its 2014 high. You can get in on Nick’s oil pick by signing up for Crisis Investing. If interested, we encourage you to watch this short presentation. It explains how you can access Nick’s top investing ideas for $1,000 off our regular price.

This incredible deal ends soon. Click here to take advantage while you can.

You’ll also learn about an even bigger “crisis investing” opportunity on Nick’s radar. This coming crisis could radically change the financial future of every American. By watching this video, you’ll learn how to profit from it. Click here to watch.

Chart of the Day

Oil and gas companies are losing billions of dollars, we’re in earnings season right now. This is when companies tell investors if their earnings grew or shrunk last quarter. A good earnings season can send stocks higher. A bad one can drag stocks down.

As of Friday, 95% of the companies in the S&P 500 had shared first quarter results. Based on these results, the S&P 500 is on track to post a 6.8% decline in earnings. That would be the biggest drop in quarterly earnings since the 2009 financial crisis.

Oil and gas companies are a big reason U.S. stocks are having such a horrible earnings season.

As you can see below, first-quarter earnings for energy companies in the S&P 500 have plunged 107% since last year. Keep in mind, this group includes Exxon, Chevron, and other blue chip energy stocks.

Again, if you’re looking to buy oil stocks, make sure you “look under the company’s hood” before you buy it. Steer clear of companies that are losing money and have a lot of debt.

Get our latest FREE eBook “Understanding Options”….Just Click Here!

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Time For Precious Metals?

Is now the time to get into precious metals? Dr. Torsten Dennin, Tiberius Asset Management AG. You can view this video and the full video archive on the Dukascopy TV page: http://www.dukascopy.com/tv/en/#184397 Смотрите Dukascopy TV на вашем языке: http://www.youtube.com/user/dukascopytvrussian 用您的语言观看杜高斯贝电视: http://www.youtube.com/user/dukascopytvchinese Miren Dukascopy TV en su idioma: http://www.youtube.com/user/dukascopytvspanish Schauen Sie Dukascopy TV in Ihrer Sprache: […]

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Commodities And Currencies

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Commodity Markets Outlook

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Silver From Mexico

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Obama’s Cuban Ambitions as Seen by Cubans Themselves

By Jeff Thomas

For half a century, Americans have been largely unable to visit Cuba and have had to rely on the US government and media for an understanding of the political, social and economic conditions there. What has been described as the “American Berlin Wall” has been successful in providing Americans with quite an inaccurate view.

Throughout this period, those Cubans who exited the island in 1959 (and their descendants) have maintained a propaganda programme that, rightly or wrongly, reflected their desire to return to Cuba and to once again rule it. Additionally, they’ve contributed regularly to both the primary US political parties in order to assure that the blockade would be maintained and that Americans would be kept out until such time as the island could be re-taken.

This is not to say that all is rosy in Cuba. For the past 25 years or more, I’ve periodically spent time there, observing its developments, beginning with its attempt to recover from the loss of its principle trading partner, the Soviet Union, in the early 1990s. It’s been a rocky road, as Cuba has sought to become an international tourist destination whilst attempting to maintain a closed, communist society. Results have been mixed, to say the least.

Still, the US government embargo remains in place and Americans have little real understanding of Cuba, or how the Cuban people view the US. All Americans can rely on is the “official view”—reports fed to the US media by their government, which, in turn, are influenced by Miami-based Cubans.

Recently, Barrack Obama visited Cuba, gave speeches and even walked the streets of Havana, “meeting the people”. Americans have now had time to digest the official US view of that visit, yet, understandably, have no idea whatsoever as to the Cuban view.

If I could sum up the Cuban people’s perception, based upon discussions with Cubans in Havana after the visit, I’d say that the best word to describe their reaction would be “wary”. Cubans are only too aware that Americans have, for half a century, received a highly one-sided view of anything Cuban and, for the most part, tend to agree with their leaders that any dealings with the US government should be cautious.

As in any country, there are varied viewpoints and, to be sure, the Cubans who oppose the existing regime to the point that they’ve stolen a boat and braved the seas to escape Cuba, would have a far different view from those who are glad to remain in Cuba.

A particular concern that they tend to voice is that Americans leaders are arrogant, seeming to believe that they have all the answers for every country and seem to perceive themselves as magnanimous, in offering to unilaterally change other countries “for the better”. In the present instance, they resent Mister Obama stating in a Havana speech that his country is considering diminishing its economic punishment of Cuba, but that, first, he would need to be assured that the Cuban political structure be altered to reflect the American model more closely. As stated by President Raul Castro in the Havana Reporter, “he should not expect the Cuban people to give up their destiny…for which they have made huge sacrifices.”

A continuing sore in the side of Cuba is the occupation of Guantanamo Bay. Cubans, when confronted with their government’s admitted incarceration of some citizens for political reasons, may respond by reminding Americans that Cubans regard Guantanamo as “the horrible torture center”, housing the US government’s political prisoners. They are bolstered in their view by American presidential candidates who vehemently support the continued violation of the Geneva Convention at Guantanamo. (Most Cubans have television and there’s no restriction on American broadcasts. Cubans therefore know far more about the US than Americans know about Cuba.)

Again, quoting the Havana Reporter, “The Cuban authorities request for the illegally occupied military territory to be returned, although spokespeople for Obama’s administration say that the subject is not on the agenda for discussion.”

Again, the American presidential message, as seen from the Cuban perspective, appears to be, “We’ll decide what we will or won’t do for you, and we’ll decide what you’ll do for us.”

And the discussion is not an isolated one. For many years, the UN has regularly held votes on the legality and morality of the blockade and, in each case, all members except the US and Israel vote for its elimination. Just prior to Mister Obama’s Cuban visit, Federica Mogherini, Vice President of the European Commission, reiterated the UN request for the “rejection of the economic, commercial and financial blockade imposed on Cuba by the US”, which she described as both outdated and illegal.

In his book, “Obama and the Empire”, Fidel Castro comments, “You state…that your country…would not tolerate any intervention in the hemisphere, reiterating that this right must be respected, while demanding the right to intervene anywhere in the world with the aid of hundreds of military bases and naval, air and space forces distributed across the planet. I ask: Is that the way in which the United States expresses its respect for freedom, democracy and human rights?”

To be sure, Mister Castro has his own agenda, as do all political leaders, yet his point is well taken. In spite of US pressure, he has outlasted ten US presidents since 1959. Cuba boasts universal literacy and the lowest rate of violent crime in the hemisphere, whereas, in the US, the percentage of those who are functionally illiterate varies between 15% and 35% (depending on the definition of illiteracy). The US also has both the highest number of prison inmates and the highest percentage of inmates per capita. Whether the US or Cuba has the greater claim to the moral high ground is therefore very much an individual assessment.

But, what’s the view on the street in Havana? What’s the reaction of the average Cuban to the Obama visit?

Well, for a start, people in the street, who are accustomed to seeing their leaders with a minimal entourage and few armed guards, were surprised to see a virtual army of suited protectors, making Mister Obama’s stroll through Havana anything but casual. Of course, this has become the norm for any American leader, but what message does this convey, when the visitor displays such a show of force?

In spite of this; however, a young waiter at a bistro in the popular Empedrado Callejón del Chorro commented that, whilst he doubted the sincerity of the visit, anything that brings the two countries closer together can only be an improvement. And, to be sure, younger Cubans are more likely than the previous generations to acknowledge that the inevitable passage out of the Castro’s leadership may be overdue, but that a softening of Cuban distrust of the “American imperialists” can only take place if the American government learns to regard Cuba as a sovereign nation, not as a whipping boy.

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And, of course, this is a sentiment that we see worldwide. The more the US positions itself as the world’s policeman, the more it alienates the peoples of other countries. At a time when the US has begun its economic decline, it would do well to soften its approach, yet it is clearly doing the exact opposite. This does not bode well for the US. No one likes a bully. Bullies are typically only tolerated until they weaken. When this occurs, people turn on the bully, whether he is a person, or indeed, a government. What we are observing is the decline of a large nation and, soon, the rebirth of a small one. As events unfold, the comparisons between the two will be fascinating to observe.

Editor’s Note: Nick Giambruno, editor of Crisis Investing, thinks Cuba is a huge investing opportunity…
Nick is an expert “crisis investor.” He invests in markets that are bombed out, hated, and depressed. This strategy allows Nick to buy world-class companies at bargain prices… and to buy a dollar’s worth of assets for pennies. This sets him up to make big gains, like the 210% gain he made on the Cypriot hospitality business Lordos Hotels in the wake of that country’s banking crisis a few years back.

According to Nick, Cuba has been in a slow motion crisis for decades. The U.S.’ ban on trade with Cuba killed any chance of economic growth for the last 60 years. But Nick says the embargo will soon become “a page in the history books.” When this happens, money should pour into Cuba. Nick has a “back door” way to profit from Cuba’s huge untapped potential…

Here’s Nick:

Cuba has over 2,000 miles of pristine coastline and the potential to be a top tourist destination. If Cuba ever opens up, there’s potential to make a fortune.

Nick’s investment is a legal way to profit from the “opening up” of Cuba while the embargo is still in place. It trades on the NASDAQ stock exchange. This investment is up over 25% in the last three months. But Nick expects it to go much higher. We can’t disclose the investment here, because it wouldn’t be fair to paying subscribers. But you can get instant access to Nick’s “back door” Cuba investment by signing up for a trial subscription to Crisis InvestingClick here to learn more.

Get our latest FREE eBook “The Rebel’s Guide to Trading Options”….Just Click Here!


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