SATURDAY EDITION

February 28th, 2015

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editorials

 
Oil Market Update
Clive Maund  Feb 24  

A Daily Energy Economics Dozen
Ferdinand E. Banks  Feb 18  

Low Oil Prices Are an Act of Economic Warfare: Veteran Investor Bob Moriarty
The Energy Report  Feb 13  

Cheap Oil Spells Opportunity to Some
Bob Moriarty  Feb 12  

XOI Index : Arca Oil & Gas Index
Thomas Chaize  Jan 23  

»» more editorials in the archives

market data


Ux U3O8 Price (Uranium)Feb 23rd, 2015
$38.75 +$0.50 www.uxc.com

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expert analysis & newsletter briefs

Manitok Energy Inc.

"Manitok Energy Inc. has decided to suspend drilling at its Entice and Stolberg properties and apply 80% of its cash flow to debt reduction in H1/15. This is a prudent move. This is survival of the fittest, and maintaining a flexible balance sheet so that you can come out on the other side when commodity prices improve is crucial.

This company has had some good wells out of Entice. . .we think Manitok has a lot of potential in some of the formations on that property. . ." (2/26/15) - The Energy Report Interview with Brian Bagnell

Manitok Energy Inc.

"Manitok Energy Inc. has decided to suspend drilling at its Entice and Stolberg properties and apply 80% of its cash flow to debt reduction in H1/15. This is a prudent move. This is survival of the fittest, and maintaining a flexible balance sheet so that you can come out on the other side when commodity prices improve is crucial.

This company has had some good wells out of Entice. . .we think Manitok has a lot of potential in some of the formations on that property. . ." (2/26/15) - The Energy Report Interview with Brian Bagnell

Rock Energy Inc.

"Rock Energy Inc. announced closing of its $13.2M bought-deal financing. . .during a period when commodity prices were falling precipitously and no bottom was in sight, we believe Rock was prudent in executing the financing to ensure it could complete its Q1/15 capital budget at a range of commodity prices without fully utilizing its credit facility. Activating the royalty holiday ensures Rock will generate the free cash flow necessary to improve its balance sheet. . .during periods of weak commodity prices, while positioning itself with dry powder to inject capital back into its Viking growth program (or make a small tuck-in acquisition on one of its exploratory ideas) when prices improve. We maintain our Outperform rating." (2/25/15) - Thomas Matthews, Alta Corp Capital

Rock Energy Inc.

"We continue to favor Rock Energy Inc. given its low declines, materially improving cost structure driven by reduced royalties beginning in Q2/15, clean balance sheet and significant torque to oil prices." (2/25/15) - Chad Ellison, Dundee Capital Markets

Rock Energy Inc.

"Rock Energy Inc. announced closing of its $13.2M bought-deal financing. . .during a period when commodity prices were falling precipitously and no bottom was in sight, we believe Rock was prudent in executing the financing to ensure it could complete its Q1/15 capital budget at a range of commodity prices without fully utilizing its credit facility. Activating the royalty holiday ensures Rock will generate the free cash flow necessary to improve its balance sheet. . .during periods of weak commodity prices, while positioning itself with dry powder to inject capital back into its Viking growth program (or make a small tuck-in acquisition on one of its exploratory ideas) when prices improve. We maintain our Outperform rating." (2/25/15) - Thomas Matthews, Alta Corp Capital


featured companies

Avanti Energy (TSX-V : AVN.V)
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Jericho Oil Corporation (TSX-V:JCO)
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Pan Orient Energy (TSX-V:CAN)
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Quantum Energy (QEGY.PK:OTC)
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The Energy Report ()
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Torchlight Energy (NASDAQ: TRCH)
Oil Drilling and Working Interest in Oil Projects
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from the publisher
  Robert J. Moriarty

Welcome to 321energy.



The Energy Report

Phil Flynn
http://www.pricegroup.com/
pflynn&pricegroup.com


The Energy Report Friday February 27, 2015

Oil Storage Wars

Ultra oil bears have been basing their predictions on many things but first and foremost they are betting on sharply lower prices because they believe oil storage will soon be filled. They say at that point oil producers will have to dump oil at any price just to get rid of it causing another sharp drop in prices. Yet that thin thinking may be flawed at least according to the Energy Information Administration (EIA) and other private forecasters that say that we are a long way away from our tanks overflowing.

As reported yesterday, by Bloomberg news, it seems there is more oil storage than previously thought. If you look at just the hard data from the EIA you would think that we were close to the tipping point. The EIA reported that crude storage capacity at refineries and tank farms in the U.S. at 521 million barrels at the end of September. Bloomberg points that with inventories rising 8.4 million barrels last week to a record 434 million, it may appear at first glance like supplies from the shale boom are on a collision course with tank tops.

Well the EIA says that is not the case. The EIA says that the weekly storage numbers include a few sources that aren't included in the capacity report, such as crude in pipelines and at well sites, that can add up to more than 100 million barrels of extra storage capacity.

The EIA told Bloomberg that "We still have a way to go before we can consider ourselves to be full," Rob Merriam, the EIA's manager of petroleum supply statistics in Washington, said by phone. "Once you correct for line-fill and lease tanks, we're pushing about 60 percent capacity utilization."

Which of course we have 40% more to go before the doomsday scenarios by the ultra bears actually kick in? Of course before we get to that point you have to assume that demand and production for oil will not change. Yet the evidence is telling us that not only is demand starting to rise again we are on track to see U.S. oil production fall. So markets forces are adjusting so we don't have to store oil in our swimming pools. Besides most pools around here are always full with snow.

Remember most of those that are predicting that oil will go to $25 or $10 were not even predicting that oil would be this low in the first place. In fact some of those making these ultra-bearish predictions were actually bullish before the drop. Not that you can't change your mind in trading as the situation changes but I have to think they misjudged the bearish fundamentals in the first place and are now overcompensating in the second place. The storage argument just does not hold water. It holds oil.

Of course oils dramatic fall was one of the reasons that folks started to focus on supply again and yesterday's EIA report. Yet, if it were so bearish why did the market rally 2 dollars before it broke hard again. In fact, despite the massive sell off, oil rebounded to close back above the significant $48 a barrel support line and is rolling again. What caused the sell-off was the strength in the dollar yesterday as strong U.S. data and worries about Europe cause safe haven buying in the dollar. The Euro though today is showing some life as German lawmakers approved a four-month extension of Greece's bailout in a vote in the lower house of parliament. This removes at least one risk that the market had fretted about. Now the market may focus on demand and more optimistic predictions for the price of oil like those OPEC that is predicting that Brent Oil will rebound. It already has had its best monthly gain since 2009.

On top of that we get the Baker Hugh's rig count data that based of my sources could provide bullish surprises. The rig count drop of last week may have been under reported. Last week the rig count was said to have fallen by 48 rigs. Yet private forecasters say the number really was more like 89 rigs. That could mean that this afternoon's number could show a sharp drop in rigs that has already seen an unprecedented drop.

See me on the Fox Business Network! Market Watch says I am a must follow! You can now follow me on Twitter @energyphilflynn! You can also like me on Facebook. Traders save money on fancy software and try out my wildly popular trade levels first! Call me at (888-264-5665) or Emailpflynn@pricegroup.com. If you want to start trading apply by hitting this link https://newaccount.admis.com/?office=269

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SATURDAY EDITION

February 28th, 2015

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