For Investors, Is This The Sweet Spot?; Oil To $80 In 2017 -- Raymond James -- July 7, 2016

Updates

Later, 10:50 a.m. Central Time: a huge whoop -- EPD increases its distribution. From 24/7Wall Street:

It was not that long ago that investors were getting ever more comfortable with the master limited partnership (MLP) segment in energy and infrastructure.

Most investors believed, or hoped, that the MLPs were free from the whims of the price of oil. That proved to be wrong due to the severity of the oil price swing. If there are a few top MLPs with solid management and a track record of managing through hard times, Enterprise Products Partners L.P. would certainly be among the top picks.

Enterprise is the king of MLPs by size ($60 billion market cap), even if 2015 revenue dropped from 2014 and even if revenues are expected to remain muted in 2016 and 2017.

And to show just how well Enterprise is running itself, the outfit just announced that the board of directors of its general partner declared an increase in the quarterly cash distribution paid to partners.

Apparently they must have a lot of cash now that ETE - WMB merger was called off.

Original Post

 

Right, wrong, or indifferent, investors have been concerned what a "rate increase" would mean for the market. Had it not been for "Brexit" it's very possible we would be hearing a lot of talk about a "imminent rate increase" but "Brexit" put a "rate increase" on hold, according to Janet Yellen. Unless this is a head fake, this should reassure investors no rate increase this year.

But even if that is not enough to make investors comfortable about no rate increase, then the fact that Deutsche Bank says there's a 60% chance of a US recession within the next 12 months would also give the Fed reason to "continue the pause."

And with a new president coming into office next January ... would any Fed president risk her job raising rates just at that moment?

Note: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on what you read here or what you think you may have read here. I post this to help me understand the oil and gas industry and to put the Bakken into perspective.

In early morning trading, some of the issues that hit 52-week highs this past week, are now pulling back slightly, a sign of profit trading in a market that is otherwise up a bit.

At midday, there are 111 issues reporting new 52-week highs vs 6 reporting new 52-week lows. Not much catches my eye, except these at new highs: XOM, GE (a huge whoop),  OKE (another big whoop), and, TransCanada (who wudda thought?).

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Energy Tweets

Wow, wow, wow: Raymond James -- Brent oil will go to $83/bbl and WTI to $80/bbl in 2017 -- that's next year, folks. But "everyone" else it seems is more bearish. A WSJ survey of fourteen (14) investment banks suggest oil in 2017 will get no higher than $57. I tend to agree with the latter. The "explosive" year for oil prices will be in 2020.

Natural gas inventories still above 10-year maximum.

Texas: top energy-consuming state in 2014 -- 13 quadrillion BTUs.

Refiners are cutting back production; summer driving boom fails to clear excess gasoline stocks.

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Update On Panama Canal

As a reminder:

The inaugural ship, Cosco Shipping Panama is a 158-foot-wide, 984-foot-long (slightly longer than three football fields) behemoth that is one of the modern New Panamax class of mega-vessels that are seen as the future of global shipping and will now be able to use the canal. 

Conversion:

• 158 feet = 48 meters
• 984 feet =  300 meters
• So, let's call it 300 x 48

Are there any Newpanamax ships "at" the Panama Canal today? You can track them here. You can easily scroll down the data base and see if any ships are 300 x 48. Today, of the first 10: none. Of the second ten:

• one, 294 x 32
• one, 257 x 32

Of the third ten, there is one 294 x 32.

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American Auto Sales In China

Ford: up 6%
GM: up 5.3% in 1H16