Entries Tagged as 'Energy'

Impact of Oil Prices to Housing Prices

In April, 2015 I wrote an article for a Houston client that was never used. Today Zero Hedge has an article titled “NAR Admits Oil Slump Finally Hits Housing Sales” that says in part, “We were told that low oil prices were unequivocally good for America, so it’s odd that, after seeing the weakest growth in pending home sales since Nov 2014, NAR blames “softness in sales on oil-related job losses from low oil prices.” Pending home sales grew 2.1% YoY in October, (way below the 4.3% expected growth and 3.2% growth in September).”

So here is the article that I wrote: Impact of Oil Prices to Housing Prices

Impact of Oil Prices to Housing Prices

Impact of Oil Prices to Housing Prices

A paper delivered in April 2011 by Rachel Ang and Xiaobing Shaui titled “The Financial Impact of Oil Prices on the Housing Market in the Houston Economy” examined the relationship between the impact of oil prices to housing prices, unemployment rate, and population in Houston. The chart above shows as oil prices increased to $80, the population increased from 3.6 million to almost 5.4 million. The census data for the area in 2010 was 5,920,416. The Texas Department of State Health Services projects the population of Houston-The Woodlands-Sugar Land MSA to be 6,473,316 in 2014.The study concluded, “There is a significant correlation between oil prices and housing prices in Houston.” Duh, you say!

Impact of Oil Prices to Housing Prices

Impact of Oil Prices to Housing Prices

The next question of the research was “To what degree are oil prices correlated with unemployment rate in Houston?” The study concluded “There is a significant correlation between oil prices and unemployment rate in Houston.”

We might conclude from the study that the last time oil prices were this low, population was about 5 million according to the study and according to the census figures about 500,000 higher, so about 5.5 million. That might mean Houston could lose 1 million people or at best remain flat from here. Second, that the last time oil prices were this low, unemployment was near 6% to 7%. Right now Houston has the lowest unemployment of the major cities in the US.

Last June, 2014, oil prices hovered near $100 and since the first of the year has traded between $45 and $55. So far the fall in oil prices hasn’t had much effect except for a cancellation of some major high rise housing projects. Belt tightening as it were. The big question is what’s next for oil? Some suggest our storage capacity in Oklahoma is full and oil will have to be sold into the market to make room for new supply. That would be bad for oil prices. Others are worried about the geo politics of oil. The Mid East is aflame with terrorists close to seizing another choke point in Aden. A cut off in oil could send oil prices rocketing.

Houston seems to be at a crossroads.

If Houston experiences layoffs by the big energy companies in Houston and higher unemployment, housing will feel the impact. The financial stress brings on financial stress in the family leading to higher debt to maintain the standard of living, divorce because of money woes, downsizing to make ends meet, and homeowners wanting to move where jobs are plentiful.

If oil prices rebound, more people will conclude that Houston for a lot of reasons, is a great place to move to. The weather is wonderful most of the year, education is one of the best in the country, and there is a lively arts and culture environment. If sports and outdoor activities are your interests, then Houston has it all. The demand for homes in the $300,000 to $500,000 range will surge and prices of housing will rise to meet the demand.

It all depends on oil. Whatever oil prices do, Houston has been through it and will weather it and come out bigger and stronger. That’s what veteran real estate people know from experience.

Mover Mike Hit 2,000,000

After an incredible June, Mover Mike hit 2,000,000 page views. I have been blogging since 2004 and it is nice to see that more people are finding this blog. Sometimes, I have considered quitting, thinking why bother, no one reads me. However, conservative fiscally, Libertarian socially, this blog joins many others who don’t like the path the U.S. is on.

No longer can we discuss things rationally and heatedly.  Now it seems the play book says to ignore the message, savage the messenger. We are seeing that currently with Trump and we read that Hillary hasn’t answered the press questions in two weeks. AND…more and more people are considering leaving the country.

Mexico”sends” their unemployed to the U.S.. How long will 93,000,000 unemployed and under employed wait to move south? How long will the drought stricken  in the south west wait to move? What happens when the U.S. becomes like Greece and can’t feed the 43,000,000 on EBT?

Stay tuned, dear reader. I hope to cover it and provide some answers. Thanks for reading Mover Mike

Make Crude Oil Exports a Part of US Trade Policy

Make Crude Oil Exports a Part of U.S. Trade Policy

Sen. William S. Cohen

Recently, former Sen. William S. Cohen made headlines by presenting a thorough and persuasive argument that President Obama should seek to make crude oil exports a part of US trade policy. The argument was presented via Time and pointed specifically to four main benefits the U.S. could enjoy by focusing more on energy exports:

1 – Exports would strengthen NATO by providing an adequate Western response to Russia’s practice of withholding energy resources as a power play. Energy exports from the U.S. would provide European allies with an alternative to dependence on Russia.

2 – Exports to the Far East would promote economic growth in allies like Japan and South Korea while opening the possibility of collaborative trade efforts with influential countries like China and India.

3 – Energy exports could promote a great deal of collaboration with Central and South American countries. According to reports by FXCM, Venezuela remains the country with the single highest volume of oil reserves. With approximately 297.6 billion barrels on reserve (ahead of Saudi Arabia’s 267.9), the country is naturally viewed as the leading source for this part of the world. However, Cohen’s argument points out that domestic challenges are causing Venezuela to scale back its exports. This results in a new need for energy resources, which the U.S. could provide, for much of the hemisphere.

4 – Easing restrictions on U.S. crude oil exports could drastically improve the economy and job situation at home. Cohen notes that crude oil exports would essentially serve to further the energy boom that has already had positive effects on the U.S. economy, specifically pointing to the “shale revolution” as an example.

As mentioned previously, it’s a very convincing argument for an increased focus on energy exports for the U.S. Not only have new technologies essentially increased the United States’ energy reserves by opening new avenues for obtaining resources, but shifts in geopolitics around the world have simultaneously created new needs in various regions. These two factors would seem, as Cohen suggests, to foster natural trade partnerships that could be extraordinarily beneficial for the U.S. economy and also save President Obama’s legacy on trade.

So why haven’t we gone about it already? Well, as is often the case with political matters, it’s a problem that sounds simple but has proven to be exceedingly complicated. Basically, as is explained in an article at Bakken, a U.S. ban on crude oil exports has been in place since the 1973 Arab oil embargo. Also, various periods of inaction in Congress since then have resulted in the ban’s ongoing existence.

This means that before the U.S. can turn its attention toward organizing and implementing crude oil and energy export programs, Congress and President Obama will have to work together to lift an existing ban. As has been proven over the years, such a collaborative effort is difficult to come by. The hope, in this case, is that the clear benefits of increased energy exports by the U.S. both abroad and at home will yield a rare sense of partnership between the president and Congress.

It’s a lot to hope for, but the benefits are clear. In the aforementioned Bakken article, former CIA director Leon Panetta and NSA advisor Stephen Hadley were quoted with the most simple explanation of the idea of energy exports: “The U.S. can provide friends and allies with a stable alternative to threats of supply disruption…. This is a strategic imperative as well as a matter of economic self-interest.”

It’s hard to imagine why we wouldn’t give it a shot.

Jenna Batten is a freelance writer based outside of Baltimore. She typically covers topics in finance, politics, and travel, and has contributed to numerous publications online. When Jenna isn’t writing, her hobbies include sailing and web design.

Note from Mover Mike – there has been some concern about exporting natural gas. Some have argued it would be good for our balance of trade, but the increased demand would raise prices for a very cheap fossil fuel here at home.

Keystone Pipeline Can Not Get Passed

20150407_rail

No wonder the Keystone Pipeline can not get passed. Have you ever wondered why we put up with oil train accidents resulting in recent months in spills, intense fires and community evacuations? Warren Buffet is the answer. His Berkshire Hathaway owns the Burlington Northern, now the BNSF Railway

According to Zero Hedge oil shipped by rail since 2010 has expanded from 20 million barrels to 378 million barrels a year and the BNSF Railway carries 70% of the oil.

Zero Hedge speculates that the “Sage of Wall Street” may be lobbying his buddies in Washington DC for a bailout. A spokesman says, “Languishing oil prices also make oil-train transportation look too expensive when compared to shipping in foreign oil.”

In recent weeks, the price gap between U.S. and Brent, the benchmark foreign crude, has narrowed to about $7 a barrel, making some oil-train shipments too costly at this time. That’s why the Key Stone Pipeline Can Not Get Passed.

OBAMA’S PLAN FOR A FASCIST AMERICA

Dr. Jack Wheeler
Behind The Lines
Friday, 13 March 2015

Americans are welcome now in Vietnam, where so many people speak English because it’s required to learn it in school as a second language. Vietnamese have embraced capitalism with a vengeance, even while they are ruled by the same Commie Party we fought in the 60s, the Hammer & Sickle flies everywhere and Ho Chi Minh is pictured on their currency.

The days of America being Hanoi’s enemy are long gone. China is the enemy today as it has been for over two thousand years of Vietnamese history, against which Hanoi needs America as an ally. The tides of history ebb and flow. America’s greatest enemy today is not external but within.

A far more mortal danger to our country than Putin Russia, Chicom China, or Reconquista Mexico is a Hate America White House with the clear goal of creating a Fascist America.

Government control of all of our major institutions and industries is taking place right before our eyes in broad daylight. If we have any chance of reversing it, we must begin by identifying exactly what is going on. The first step is to call what is going on by its accurate name: fascism.

The Left loves to use the term as a pejorative sneer for anything lefties don’t like. But as an economic theory it has a specific meaning.

Socialism is government ownership of businesses and industries, with everyone in the economy – workers, managers, executives – being an employee of the State. In Castro’s Cuba until recently, even shoeshine boys had to belong to a state cooperative.

Fascism, by contrast and far more dishonestly, is government control of ostensibly private business and industry, the owners and executives of which can do nothing without bureaucratic regulatory approval. This is the economy Zero is determined to achieve. He is doing so with astonishing rapidity – and with Chicago gangsterism and corrupt thuggishness, hallmarks of any fascist regime.

So rapid and thuggishly thorough it leaves the Marxist agenda of the Frankfurt School’s “march through the institutions” – both economic and cultural – of the 20th century in the dust. It is a 21st century blitzkrieg of fascism. Let’s itemize it.

*Healthcare. This is the most obvious. Obamacare is a fascist federal takeover of the entire scope of health and medical care in the US, from insurance to hospitals to physicians.

*Banking. Less obvious is the extent to which the Dodd-Frank Act, named after two of the most corrupt crooks ever in Congress, gives federal regulators unlimited arbitrary control over the entire banking industry in the US.

*Communications. The recent ruling of the FCC now makes the Internet a federally regulated utility, giving Zero’s bureaucrats unlimited power for stifling innovation, competition, and websites they disapprove of. Add to this, of course, Zero’s NSA that has unlimited power to spy on the private communications of all Americans.

*Energy. The excuse of imaginary man-made global warming as a rationale for Climate Fascism to control energy production has so far failed – thanks to fracking and global cooling. But not for lack of trying, as climate fascists become ever more hysterical in their demands and hatred for anyone who denies their lies.

*Education. Common Core is the Department of Education’s takeover of local and state education on steroids. There is no constitutional authority for the very existence of the federal Education Department, much less its Anti-American history propaganda of Common Core or Mrs. Zero’s fascist school lunch starvation program.

*Defense. The combination of the homosexualization of the military, massive defense cuts, and the promotion of officers who are merely politically correct bureaucrats in uniform is reducing the Pentagon to Zero’s Poodle.

Add to this the treating allies like Israel with contempt, the refusal to defend America from Moslem barbarianism, and helping Iran to acquire nuclear weapons.

*Family and Culture. Homofascism, same-sex “marriage” now morphing to homopolygamy, the unceasing attempts to racially divide America and demonize whites as racist (witness Zero’s latest: “Slaves built the White House”).

*Economy and Unemployment. Crony capitalism, mass unemployment and disability payments to gain mass dependency on government welfare. People dependent on you vote for you.

*Justice and the Rule of Law. Two words define the most corrupt federal justice system in US history: Eric Holder. Add to this Zero’s blizzard of unconstitutional edicts (Executive Orders and Memorandums), and the blackmailing of Chief Justice John Roberts (and how many other judges?) to rule as demanded.

*Democracy. The purpose of Zero’s Amnesty for millions of illegal aliens is to enable them to illegally vote to place Democrats in permanent power.

Put this all together, and you see it is a fully comprehensive across-the-board plan to create a Fascist America. The only way to stop it is to start pulling it out by the roots.

E.g., Dodd-Frank and Obamacare must be repealed, FCC net neutrality reversed, every Zero EO undone, the EPA and the Department of Education must be fully defunded and eliminated, no welfare of any kind for illegals… the list of what must be done is very long.

None of this can be done, however, without achieving the first priority: explaining exactly why Zero is a fascist, why Dems are fascist, why the Left is fascist – and refusing to support, donate money to or vote for any Pub politician who won’t do so.

Zero, the Dems, the Left’s Grievance Industry, and their propagandists pretending to call themselves “journalists” have got to be put on the defensive. They have to be labeled for what they in fact are: fascists advocating smothering (and unconstitutional) national government control over every major business and institution in America.

Thus the most critical issue of our day is Freedom vs. Fascism. The 2016 contest for Congress and the White House must be framed in this context.

“Are you for freedom or are you for fascism?” is the question to ask any politician. “Are you for liberating America’s businesses and institutions from Obama’s fascist controls or not?”

Freedom in America is dying, but it is not dead yet. It can still be rescued and revived – but not unless we correctly diagnose what is killing it. Only then can radical surgery be performed to remove the cancerous tumor of Obama Fascism causing its impending demise.

Exposing Obama’s Plan for a Fascist America is where we must start. Let’s get started.

From To The Point News

Mark Goldes

Back in 2008, I wrote about Mark Goldes and his search for Zero Point Energy. He thought he was close, but no! According to SFGATE, he has had some successes, such as a  technology called the UltraConductor, which purports to be capable of conducting electricity at room temperature with no resistance, thus vastly improving fuel efficiency.  Now he thinks he is close,within a few months, he says, to a breakthrough that could revolutionize where people get fuel.

Catch up to Mark Goldes. Is he the guy from Atlas Shrugged who invents a motor?

Oil Collapse Threatens Universe

George Ure at Urban Survival blows my mind with this information today about the Oil Collapse:

Oil Price Collapse

Oil Price Collapse

But for the past many months I have been telling you what? ‘

That right: Oil could collapse into the $30s per barrel.

That’s because the world is in the grips of a gigantic deflation the likes of which have never been seen before and that in itself is remarkable and worthy of discussion.

First, however, we need to be clear that a barrel is not a barrel. If you are talking about the ubiquitous 55-gallon drums, popular in American chemical, refining, and coatings, that’s not what a barrel of oil is: Write this down: Oil is 42 gallons per barrel.

Just how cheap is oil, right now? Well, if you drop by the local convenience store this morning, oil is cheaper than your coffee by a damn-sight. Grab a bottle of that water (a large Desani or Aqu-What’s-It) and you will pay more for the water than for oil. (Admittedly, there’s a price off convenience and maybe if water folks made a 42-gallon size. Even so, compare oil to those 5-6 gallon water jugs at the store.

While all of this may sound like really, really good news, oil breaking into the $51 range this morning increases the odds of panic in financial markets this spring. Think you could wake up to a Dow 2,500-4,000 points lower than where we are right now before summer? Don’t bet against it.

Part of the reason oil was so high (for so long) is the Fed’s quantitative easing. Usually when there’s a big recession (remember 2007-2010?) prices come right down, everyone sees a bargain, and recovery begins.

Unfortunately, what the Fed’s money give-aways have done is set a semi-permanent deflation expectation in place. While the QE money kept deflation from becoming obvious (and wage collapsing, and even more massive unemployment) it is now off the table and the price of oil is dropping quickly.

Let’s run a number or two to show economic impacts: Let’s say you bought a car getting 18 MPH highway, $4.25 Gas and drove 100,000 miles. Total fuel bill? $23.611.

Fast forward to my son’s car (Versa) mostly highway and around 37 MPG and gasoline we’ll use Triple A’s national average of $2.199. Driving it the same 100,000 miles, his fuel bill will only come to $5,943 and change.

This is whatcha call an economic shock. Car costs (on a real cost per mile basis) are down to about 1/4 of where they were in the past 7-years. This is deflation and huge deflation at that.

Oil could drop down to the $50 range. But if it can take out $50, why not $48? And then what holds it at $45? You see how this goes.

Putin Loses Control

russia_bnp_rates_3140228c

By , International Business Editor

Vladimir Putin has lost control of Russia’s economy and may be forced to impose Soviet-style exchange controls after “shock and awe” action by the central bank failed to stem the collapse of the ruble.

“The situation is critical,” said the central bank’s vice-chairman, Sergei Shvetsov. “What is happening is a nightmare that we could not even have imagined a year ago.”

The currency spiked from 71 to 98 against the euro yesterday (12/16) in the biggest one-day drop since the default crisis in 1998 as capital flight gathered pace, despite a drastic rise in interest rates to 17% the day before (12/15) intended to crush speculators and show resolve. It closed at 87, and at this writing today (12/17) is at 83.

Yields on two-year Russian bonds spiraled to 15.36%, while credit default swaps are pricing in a one-third chance of a sovereign default. The shares of Russia’s biggest lender, Sberbank, fell 18%.

Neil Shearing, from Capital Economics, said the spectacular failure of the rate shock may bring matters to a head. “If a rise of 650 basis points won’t do the job, we are near the end. That means stringent capital controls,” he said.

In Washington, the White House said it had no intention of easing pressure on Russia to halt the freefall. “It is President Putin’s decision to make. The aim is to sharpen the choice that he faces,” said White House spokesman Josh Earnest yesterday.

After years of bluster and suggestions by Mr. Putin that the US is a paper tiger, the Kremlin is now coming face to face with the cataclysmic consequences of what it has done by invading Ukraine and changing Europe’s borders by force.

Continue article…

Two Buddies

 

Laugh it up boys!

Laugh it up boys!

The mandate from the 2014 election doesn’t matter as long as these two are buddies.


Crude Oil Slides to Multi Year Lows and What to Expect

Looking back to 2007 (seven years ago) we have seen the price of crude oil perform incredible price swings. No matter the time frame in which we observe price when an extreme price spike takes place due to news/event, statistics show that half if not all the event driven price spike will eventually be negated in the future.

The perfect example of this is the rubber band affect. If you pull an elastic band in one direction, eventually when it breaks or it’s released, the band will retrace back to the norm and then go in the opposite direction. You can see this on the chart from 2008 high of nearly $150 to the 2009 low of $40. Price then lost is momentum and has been somewhat range bound from 2011 – 2014 right in the middle at $95 per barrel.

Observing the price chart of oil below there are many technical indicators and patterns at play. The first important pattern to identify is the series of higher lows shown with the green trend line sloping upwards.

A rising trend line that has multiple pivot lows (bounces up the trend line) the price of oil creates what I call a perfect storm for waterfall type selloff. This is exactly what we have seen over the past 3 months.

Each time one of the pivot lows are breached, the stop loss orders are triggered for investors. This causes a flood of sell orders forcing price lower to fall below the next pivot low etc… This may look and sound easy to trade, but keep in mind this is a monthly chart, and short term traders are not trading this long term time frame. Only investors would be focusing on a move that would take months to a year to unfold.

The second key indicator to look at is the 61.8% Fibonacci retracement level. This level typically acts as a support level for a small bounce usually. Because the 61.8% level is also in alignment with a previous consolidation, and a pivot low, both which have been highlighted on the chart, I suspect a bounce around the $65 level should take place.

The final potential bottom could take place near the 2009 low. It is a long way away but anything is possible and what we think is most unlikely to happen is exactly what the market does sometimes.

crudeoil

 

Crude Oil Conclusion:

In short, I think what crude oil is doing is healthy and needed for several reasons. If I let my bias/option shine through, I feel the big oil and gas companies have been taking advantage of us with their ridiculously high gas prices over the last seven years.

The multi-billion dollar, cash rich corporations need a little wakeup call. And the hair cut in their share price should be great for investors. This allows them to build or re-enter new positions at a better price with a higher dividend yield.

I will be watching the hourly and daily charts for a bottoming/bounce formation in the next week. But any bounce could be short lived as sellers appear to be aggressive still.

Receive my personal trade alerts via email and SMS text alerts at www.TheGoldAndOilGuy.com with a 50% Black Friday Offer Today

Chris Vermeulen

Sincerely,

Chris Vermeulen
Founder of Technical Traders Ltd. – Partnership Program

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