Analysts and economists are trying to figure out how falling oil prices impact various economic sectors. Many 401ks and pension funds invest in oil companies, but as long as funds are diversified they should not be hit too badly by the oil price decline. “But this is precisely why investment advisers tell us to diversify, diversify, diversify, and invest for the long term. Overall, although there has been considerable market volatility of late, we’ve been in a rising market over the past year (and indeed, ever since the market’s low in 2009). Oil stocks aside, if you look at the Dow Jones industrial average over the last year, or the S&P 500, stocks are very clearly up, not down.” [Washington Post]
The US subsidiary of Australian miner BHP Billiton is cutting the number of rigs operating in the Eagle Ford, Permian Basin and Haynesville from 26 to 16. “At the end of 2014, BHP was operating 26 U.S. land rigs – 18 in the Eagle Ford, five in the Permian Basin in West Texas and three in the Haynesville Shale in Louisiana. BHP is looking to sell its Fayetteville Shale acreage in Arkansas and has no rigs operating in that field. The company said it will focus 2015 drilling activity on its liquids-rich Black Hawk field in South Texas, some of its best shale acreage. Black Hawk in DeWitt County is in what the industry calls the “sweet spot” — a place with both prolific production of crude oil and condensate, a light oil.” [Fuel Fix]
German utilities have struggled with the country’s recent energy policy changes that prioritize renewables. In response, Eon split its business into a renewable energy-focused company and one that operates fossil fuel generation units. Now REW Dea says it has not ruled out a similar move. “RWE, which operates Germany’s largest fleet of coal-fired stations, is grappling with net debt of about 30 billion euros ($35 billion) as prices paid to power producers for electricity trade near a record low. The company has sought to cut costs and sell assets, including the 5 billion-euro disposal of its oil and gas unit, Dea, to a group of Russian investors.” [Bloomberg]
