Finally – FINALLY! – a week of energy news to report that is mostly devoid of TRUMP.
If you’re investing in energy, that lack of Trump has translated into some pretty good news – and not just the continuing constructive price for oil. Here are this week’s three biggies:
WEIGH THE KURDS – A horrible pun, sorry. Kurdish Independence has been an ongoing struggle, and the recent ISIS losses have given the Peshmerga renewed room to push back on the centralized Iraqi government and Turkish forces looking to retain control of Kurdish land – and Kurdish oil. The US is supposedly supportive of Baghdad, but also historically very supportive of the Kurds. Touchy. Along with Trump’s unilateral questioning of the Iran Nuclear deal, you can bet that there’ll be continued skirmishing over these northern Iraqi oil assets, which total about 1.2m barrels a day. (See, I was just kidding about Trump being completely absent from the oil news – it just can’t happen). I don’t expect any significant shut-offs unless you see a full-scale civil war – but that’s been a legitimate Kurdish threat for more than a decade now. BULLISH.
The IPO’s a’comin’…or is it Saudi minister Al-Falih again confirmed the Saudi Aramco IPO on track for 2018 – this after several rumors that the Saudis would call the whole thing off, or alternately look to privately place the entire 5% of the proposed sale in Chinese hands. Why would they even consider that? A public offering would bring a much higher price, as well as allow continued easy issuance of shares to raise capital in the future. The story is that the Saudis threatened to halt the IPO to pressure the London stock exchange to forego full due diligence – the Saudis can’t stand opening up their books. But guess what? The Saudis have been working on production cuts and compliance too hard to put this IPO in jeopardy. It’ll come off for sure………and it’ll be a doozy. BULLISH.
Australia’s just as backwards as us: You think Trump (crap, here he is again) is the only one looking to turn the clock back on coal? Hardly. The Australian government has entirely tossed their renewable power initiatives, at least for now. Power prices in Australia are spiking and Europe proved how expensive it is to go green. If you’re a country like Australia (or the US), coal remains cheap, ready….and tempting. In their defense, the Aussies don’t have the kind of access to either solar panel technology or really cheap Natural Gas that we do here in the US. So, I guess we’re still the most backwards of all. BULLISH
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