Miscellaneous Assorted Madness
The truth is I cannot give you the one main factor currently driving the energy complex. Oil prices, as well as products, are being pushed and pulled in a heterogeneous hurricane of conflicting factors that are creating the type of volatility that we have come to love in this complex. Today is another example of a multiplex of news and it makes me sit here and wonder just what the heck I should lead with.
Perhaps we should lead with China's GDP. Of course China is the main reason that many traders stay bullish in a world of rising economic uncertainty. China's GDP came out slightly under expectations at 9.1%. Some commodities sold off on the news but weren't we worried about China overheating just a year ago? While the market got a bit of a bearish jolt the slowdown in GDP should have been expected. Of course with the world worried about Europe and it's never ending economic crisis, it is no wonder some latched onto these numbers.
You see dreams last only so long yet Angela Merkel says stop screaming. The EU debt crisis will not be solved in seven days and instead of dreams, we are back to the nightmare.
Remember when everyone criticized the US downgrade saying why down grade the US and not France! Well now they may get their wish. Moody's is warning that France could have their Aaa rating cut. The risk premium on the French bonds soared hitting a 16 year high against the German bonds.
Despite the scary outlook there is nothing stopping the activity in the oil patch. The Shale revolution continues to change the outlook for our nation's energy future. Kinder Morgan is to buy El Paso to control and create the pipelines to move our energy bonanza. You have Statoil acquiring Brigham for $4.4B, entering Bakken business. Penn Energy says Helge Lund, President and CEO of Statoil said, "The US unconventional plays hold a substantial resource base and represent an increasingly important part of future energy supplies. Statoil has step by step developed industrial capabilities through early entrance into Marcellus and Eagle Ford. Entering the Bakken and Three Forks tight oil plays and taking on operatorship represents a new significant step for Statoil. We are positioning ourselves as a leading player in the fast growing US onshore oil and gas industry, in line with the strategic direction we have set out.”
So, I guess that means that company has corrupted the Obama led State department?
Let's kill more jobs! Only the jobs these Democrats think are fit for you. Dow Jones reports that more than 30 U.S. lawmakers have come out against the Keystone XL pipeline, alleging that the Canadian company that wants to build the 1,700-mile oil pipeline has gained too much influence over a review at the U.S. State Department. In a letter to Secretary of State Hillary Clinton released Monday, 33 House Democrats raised concerns about the role played by TransCanada Corp. (TRP) in selecting a company to perform a high-profile review of the pipeline. The lawmakers say TransCanada's involvement in that process cast doubt on the quality of the review. "Rather than acting as fair arbiters of TransCanada's application to build a massive pipeline," the State Department appears to be acting, "as little more than cheerleaders for the company's bid," the lawmakers say in their letter. Among the lawmakers are Reps. Earl Blumenauer (D., Ore.) and Dennis Kucinich (D., Ohio). Representatives for the State Department and TransCanada were not available for comment. In the past, TransCanada representatives have defended the quality of the State Department's review of Keystone XL."
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at email@example.com.