If the sky isn’t falling when it comes to energy availability, what does that mean for your portfolio?
After years of forecasts – part of a long tradition – that oil supplies were close to running out with the potential for immense supply shocks for the global economy, Wall Street analysts are beginning to build a new consensus around the potential for an unexpected and still-emerging demand-side shock. Keep reading →
Natural gas has been trading in a serious downtrend starting in November, but Monday’s upside action constituted a clear breakout from that trend.
So what’s behind the strength? Keep reading →
Federal officials are expected to slap a Deutsche Bank AG (DB) subsidiary with a $1.5 million penalty in coming days after concluding that its energy-trading arm extracted illicit profits from the California electricity marketplace in 2010. The action, which people with knowledge of the case said could come as soon as Tuesday, is part of a larger crackdown by the Federal Energy Regulatory Commission targeting electricity-trading schemes that it says resemble the market manipulations that caused California’s energy crisis more than a decade ago. Other banks being investigated for alleged electricity market-manipulation tactics include Barclays PLC (BCS) and J.P. Morgan Chase & Co. (JPM). They are contesting the allegations.
The power industry has conducted a complex dance of consolidation and division over the past few decades in response to technological disruption, regulatory trends and financial shifts.
Recent years have brought about a new wave of consolidation and utility bankers have been busy ushering companies into new larger footprints through buying complementary assets rather than embarking on broad new competition-based construction and infrastructure investment programs. Constellation is now part of Exelon, and Duke Energy is adding further to its portfolio with the acquisition of Progress Energy, the two highest-profile deals in a spate of transactions all the more surprising for the tightness in financial markets since the 2008 crisis. Keep reading →
Independent oil and gas firms are attempting to focus on the fundamentals following major allegations against one of the sector’s most colorful figures. The looming dispute over Chesapeake Energy’s chairman comes as companies already contend with a glut of natural gas production amid high prices for oil and liquids production warping traditional price dynamics.
US oil and gas company executives “talked turkey” with Wall Street analysts in New York last week at a high-level investor conference. Every spring, the industry’s exploration and production community convenes to discuss their business models and corporate strategies with the analysts who rate their company’s stock for investors. Keep reading →
Financial regulators approved more rules Wednesday that they say will limit speculation in financial and commodities markets through derivative investments, to reduce the risk of another financial crisis and future taxpayer bailouts.
Among other things, the new rules determine which banks, Wall Street firms, hedge funds and energy companies will be designated swap dealers or “major swap participants” under the 2010 Dodd-Frank financial reform legislation. Keep reading →
As some of the most tempting government financial incentives begin to fade from the renewable energy space ahead of deadlines at the end of 2012, bankers and project developers specializing in renewable energy projects are reworking their models.
The 1603 program that gave cash grants in lieu of tax credits and the production tax credit that underpinned the wind industry are both on the sidelines as financiers review upcoming projects still in the pipeline. The pipeline of proposed projects is flush, but shifting priorities, transmission limitations and near-invisible overall power demand growth are weighing on a sector already struggling to compete with low natural gas prices. Keep reading →
Chinese Recession: Real or Not?
By Peter GardettProbably the best indication that the Chinese economy has entered a meaningful recession is the Chinese central government’s urgency to reassure everyone it isn’t so.
There have been rumblings since the end of last year that the Chinese economy was slowing, with poor lending practices, a property bubble and poorly managed internal migration all part of the new scenario sketched out for a possible recession. If it wasn’t for Europe’s unceasing convulsions over the credibility of its currency union the outlook for Chinese growth would be the central question for global economic trend-watchers. Keep reading →