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Posts tagged “investing”

By Robert Rapier on Jan 10, 2009 with 5 responses

More Ethanol Plants Going Down

I won’t say I told you so, but I will make a prediction here: VeraSun Suspends Production at Three Distilleries Jan. 9 (Bloomberg) — VeraSun Energy Corp., the second- largest U.S. ethanol producer, has idled three distilleries as demand falls and prices fail to cover the cost of production. Producers have been struggling to make profits amid fluctuations in corn prices. Pacific Ethanol Inc. today said it will suspend output at its plant in Madera, California. On Jan. 7, Aventine Renewable Holdings Inc. said it halted construction of its refinery in Aurora, Nebraska, for up to 180 days. Vinod Khosla hasn’t been immune: Last month, AltraBiofuels Inc., which counts venture capitalist Vinod Khosla among its investors, shut production at its… Continue»

By Robert Rapier on Dec 23, 2008 with no responses

Loading Up on PBR

A little over a month ago, as a result of the dramatic fall in the market capitalizations of oil companies, I opened up a brokerage account with Ameritrade to take advantage of the fire sale. Besides my ConocoPhillips (COP) stock, most of my investments are diversified in various mutual funds – often diversified into things I don’t know too much about. As I have said many times before, I am a long-term investor. Short-term volatility doesn’t impact me much; my time horizon when I buy a stock is 5-10 years out. Therefore, I see an opportunity. Do I think oil prices will be hanging around $40 in 10 years? Absolutely not. I think the OPEC cuts will begin to bite,… Continue»

By Robert Rapier on Nov 20, 2008 with no responses

Mega-Bear versus Super-Spike

Update: Never say never. Today, the prediction I made in 2005 that WTI would never again fall below $50 has fallen. Front month WTI as of this writing has dipped to $49.75. But it will never fall below $40. ——————- In 2005, with oil trading in the $40′s and $50′s, Goldman Sachs raised some eyebrows when they predicted that we could soon be looking at a ‘super-spike’ and oil prices going as high as $105. As this scenario played out this year, the analyst who made that call – Arjun Murti – raised the ante and said that we could soon see oil at $200. The New York Times, in an article in which they dubbed him an ‘oracle of… Continue»

By Robert Rapier on Oct 24, 2008 with no responses

Ethanol Series at Financial Times

Financial Times has put up a series on ethanol in their “In Depth” section: In Depth: Ethanol I haven’t had a chance to read the articles, but did speak with a Financial Times reporter and had several e-mail correspondences prior to publication of the series. I don’t know yet if they used anything I gave them, but we covered quite a bit of ground. The primary focus of the series is on the causes of the ethanol boom and subsequent bust. I just arrived back in the U.S. last night, so as soon as I liquidate a ton of correspondence, I will put up some new posts.

By Robert Rapier on Oct 10, 2008 with no responses

The Demise of the Oil Bubble

When I made my $1,000 bet that oil prices wouldn’t reach $100 in 2007, I felt like that was a pretty safe bet. Up until about the first week of September in 2007, it was looking like I was cruising to an easy win. But then oil prices went on an unprecedented run. Prices climbed almost 50% between September and the end of the year, and twice came within a whisker of reaching $100. Then, on the first trading day of 2008, the $100 mark was breeched, and eventually soared to almost $150/bbl in July of 2008. I won the bet, but a lot of people felt like I had really lost, as the point I was trying to make… Continue»

By Robert Rapier on Oct 1, 2008 with no responses

Five Reasons Oil is Headed to $250

Any time I write about investing, I always stress the long-term. Short-term fluctuations don’t drive my investment decisions. I try to see 5 or 10 years into the future, and position myself accordingly. This is a big part of why I started to shift money into oil beginning in 2002; I felt like I could see the supply/demand handwriting on the wall. My long-term strategy is why I don’t get too excited about oil shooting to $147 or correcting back to below $100. The only question for me is “Will oil be higher or lower in 5 years?” At no point since 2002 have I felt like the answer to that question is “Lower.” I can’t see any combination of… Continue»

By Robert Rapier on Sep 3, 2008 with no responses

SPR is Being Tapped

In response to Hurricane Gustav and the oil production that was taken offline as a result, the federal government announced that 250,000 barrels of oil would be released from the Strategic Petroleum Reserve: Oil prices drop as US opens reserve taps LONDON (AFP) – Oil prices fell on Wednesday as the US government decided to release crude stocks from its strategic reserve after Hurricane Gustav halted energy production in the Gulf of Mexico. “The release of the oil will prevent any shortage and that will, of course, help calm the market,” said Victor Shum, an analyst with energy consultancy Purvin and Gertz. The United States announced late on Tuesday that it was releasing 250,000 barrels of oil from its strategic… Continue»

By Robert Rapier on Aug 15, 2008 with no responses

Massive Solar PV Deal

Sorry for the lack of postings/comments in the past few days. I have been traveling, and just arrived back in the U.S. I have lots of things to catch up on (family time, among the most important) and I have to prepare my presentations for the ASPO conference (I will be presenting on “Biofuels” and on “Tracking Public Data” such as EIA and IEA numbers). I also have a staff meeting the first week of September. My posting frequency in the next 30 days or so is likely to drop down to 1 or 2 a week, and then should go back to normal following ASPO which begins September 21st. In the meantime, there was a major energy story yesterday… Continue»

By Robert Rapier on Jul 8, 2008 with no responses

Let’s Talk About Personal Finance

This is a digression from my normal posts on energy and the environment. As I have said before, this is not a blog on investing or personal finance. Despite that, finance and energy often intersect, so it is a topic that comes up frequently. It is a topic that I am frequently asked about via e-mail, especially in today’s economic climate. Maybe my experience can help someone else avoid some of the mistakes I made. This is not advice directed at the advanced investor. They would have learned these lessons long ago. This is addressed to the average family who may have a negative savings rate, and is struggling to make ends meet. The idea was spawned by a recent… Continue»

By Robert Rapier on Jul 3, 2008 with no responses

The Speculation Question

I have grappled over the past year with the question of just how much speculation is playing a factor in runaway oil prices. I think it is primarily a supply/demand issue, but I feel that such a large flow of money into commodities is also driving the surge. Not so, says a new article in Fortune: Hunting for oil villains NEW YORK (Fortune) — Atlanta hedge fund manager Michael Masters has been a star witness in two recent Congressional hearings on how speculators are supposedly driving up oil prices. Masters and I don’t see eye-to-eye on this issue, so I was surprised to get a call from him after my “Don’t Blame The Oil Speculators” column went up on… Continue»