Perspectives Blog

Lifting the U.S. oil export ban – Who wins?

Jonathan Mogil, Portfolio Manager and Senior Analyst | March 24, 2014

…ustry participants and elected officials have made recent calls to reconsider the 40-year-old ban exporting U.S. oil. Lifting the crude export ban would strengthen the U.S. oil industry as well as the overall economy. Oil producers would naturally benefit from either a full repeal of the ban or any relaxation of U.S. oil export policies; however, independent refiners would likely see their profitably decline. The Energy Policy and Conservation A…

Oil at $70 — How will the markets rebalance?

Jonathan Mogil, Portfolio Manager and Senior Analyst | December 8, 2014

Lower oil prices should translate into higher demand as a result of cheaper petroleum prices and through higher global GDP growth, which in turn drives oil demand. While there are several factors that could serve to offset this higher demand, we should see some additional demand as a result of lower prices. The entrance of U.S. shale could lead to a smoother and faster self-balancing mechanism, but in the short term, the absence of OPEC will ma…

Turmoil in Iraq – Implications for the oil market

Jonathan Mogil, Portfolio Manager and Senior Analyst | June 30, 2014

The impact of Iraq’s turmoil on oil prices has been fairly muted, but any escalation of violence could pose a serious threat to the stability of global oil markets. With Iraq accounting for the majority of OPEC’s production growth, the market has started to rethink long term supply-demand dynamics and adjust commodity forecasts. Longer term oil prices also face upward risks, as the market has been expecting strong production growth from Iraq wh…

Oil and the high yield market

Columbia Management, Investment Team | December 8, 2014

…of the underlying asset value and the continuous need for capital required by energy companies to replace their oil and gas production.  In addition, the U.S. shale revolution has brought a number of new companies to market for growth. Furthermore, over the past four years, oil has averaged around $90/barrel (bbl), oil price volatility was low by historical standards, the high yield market was conducive for new bond issuance and rates were low….

Special report – Commodity markets outlook

Columbia Management, Investment Team | July 21, 2014

…emain in backwardation, that is to say that the prices for immediate delivery will be higher than the prices for oil five to 10 years ahead, and similarly in the short term we recognize that prices for WTI will also be in backwardation. But as oil production continues to increase in North America, we would expect to see that curve eventually flatten out. Interestingly, when these curves are persistently in backwardation, as in the case of WTI, th…

Comments on the effect on global markets from the Ukraine crisis

Mark Burgess, Chief Investment Officer, Threadneedle Investments | March 12, 2014

…ssia and Ukraine but also the weaker growth outlook in Brazil and China. In commodities, Russia is a significant oil player, supplying 30% of Europe’s gas, with 50% of that piped through Ukraine. Any move to curb Russian oil exports by the EU could easily drive Brent crude oil into the $140-160 a barrel range. We therefore do not expect major sanctions against the country. Elsewhere, investment grade and high yield markets have been unmoved by th…

What to expect from U.S. midterm elections

Robert McConnaughey, Director of Global Research | October 20, 2014

…taunch defender of coal, becoming Senate Majority Leader, Lisa Murkowski (R-AK), a vocal supporter of legalizing oil exports, heading the Senate Energy Committee and Jim Inofe (R-OK), famous for calling global warming “the second biggest hoax ever” stepping in as chair of the Senate Committee of the Environment and Public Works. Prospects for LNG and crude oil exports, accelerated drilling licenses offshore and on federal land, and reduced regula…