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Transocean's Bob Long Challenged on Dividend by Shareholder

On February 17th, the last participant on the Transocean Ltd. (RIG-NYSE) earnings conference call was Leon Cooperman, the head of the Omega hedge fund.  RIG’s CEO, Robert Long, may have wished that he had ended the call one question earlier.  The previous day, RIG announced it would be asking its shareholders to approve and authorize the board of directors to repurchase shares equal to CHF 3.50 billion ($3.02 billion).  Based on RIG’s February 20 closing share price ($59.52), the buyback amount could purchase approximately 50.7 million shares, or close to 16% of the company’s outstanding shares. =>Continue Reading

Baltic Dry Index Rally A Sign of Economic Recovery?

Most of the economic news in recent weeks has been dismal, although some investors welcomed the preliminary fourth quarter of 2008 U.S. GDP estimate of a decline of only 3.8% as a positive because it wasn’t the 5% or 6% declines expected by most economists. The latest data from the International Air Transport Association (IATA) said that while international passenger traffic grew 1.6% last year, down from the 7.4% growth of 2007, it fell in December by 4.6%. The shocking statistic, however, was for air cargo, which fell by 4% during 2008; but collapsed in December by 22.6%. =>Continue Reading

Oil Prices Manipulated By Storage Problems

We have written about this issue in our latest Mustings, but the FT carried an article written by Ed Morse, formerly the chief oil economist of Lehman Brothers and now with oil trading firm LCM Commodities, that argues the declining value of West Texas Intermediate (WTI) as an accurate measure of oil prices. =>Continue Reading

Oil Service Industry Gets Some Good News

Since the middle of 2008, the news impacting the oil service industry has mostly been bad. Collapsing oil and gas prices and reductions in oil company capital spending have undercut growth in the industry. From bullish outlooks to concern over how many people to lay off, oil service companies have experienced one of the sharpest business reversals in decades. =>Continue Reading

Oil Demand Forecasts Down But Will Oil Prices Follow?

Late last week the International Energy Agency cut its forecast of global oil demand both for 2008 and 2009. They now see last year's demand down 300,000 b/d and this year's consumption off 500,000 b/d. that would mark the first time since 1982-1983 when oil demand fell two consecutive years. This forecast was echoed today by Macquarie Group in Australia. They see oil demand in 2009 down 570,000 b/d. They are also cutting their global oil price forecast to an average of $59 a barrel, with the first half of the year ranging between $40-$50. =>Continue Reading

FOX Business News Headline Misleading

FOX Business News has a heading on a story about oil prices falling to $39 a barrel, which says oil traders were worried about oil demand. This is despite the prediction of colder weather in the Midwest and Northeast later this week and next weekend. The Arctic Express heading down from Canada will even send temperatures in the Houston area into the upper 20s. That's cold and will certainly boost energy consumption. =>Continue Reading

Terrible Auto Sales in 2008 Portend Problem For Oil Demand

The automobile industry reported its December sales with an across-the-board decline of 35%. This brought full-year unit sales to 13.24 million, the lowest number sold in America since 1992. For the year, industrywide sales fell 18% for the worst year-to-year drop-off since the early 1970s. =>Continue Reading

Oil Prices In 2009

We were intrigued by the results of the recent CNBC poll of money managers on the question of what oil prices would be in 2009. According to the responses, only 2% of respondents think oil prices will average less than $30 a barrel. In contrast, no one believes they could average $75. Some 42% of those polled say prices will average $30-$50 while 56% say it will be between $50-$75. =>Continue Reading

Green Autos A Victim of Low Gasoline Prices

An article in today's Financial Times discusses the latest data on automobile sales in the United States. The data for November from Autodata showed a 53% decline for hybrid car sales compared to an overall auto industry sales drop of 37%. On Monday, Autodata is scheduled to announce December auto sales figures and expectations are that the trend in falling hybrid sales will continue. The reason is simple - lower gasoline prices. =>Continue Reading

StatoilHydro Move Signals Lower Driller Earnings

StatoilHydro (STO-NYSE) announced it is ending a rig procurement effort that began this summer. The reason for the termination signals lower rig day rates in the future along with reduced earnings for offshore drilling contractors such as Transocean (RIG-NYSE), Noble Corp. (NE-NYSE), ENSCO International (ESV-NYSE), Diamond Offshore (DO-NYSE) and Atwood Oceanics (ATW-NYSE)to name a few. =>Continue Reading

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