The Era Of Oil And Gas Is Nearing Its End

American Energy Consumption by Source, 1775-2012 (Source: Energy Information Agency, via Bloomberg)

 

The history of crude oil and natural gas is a history of technological innovation. Until recently the innovation supported crude oil and natural gas. Now, it challenges it, causing structural changes in the crude oil and natural gas markets.

Originally, crude oil was only used for lighting. This changed following the invention of the internal combustion engine, which outperformed steam engine in power, range and ease of operation and maintenance, and the invention of the conveyor belt, which made it possible to mass-produce the internal combustion engine at a price which was affordable to the masses. Not much later, crude oil became the transportation fuel of choice. The horse drawn carriage was replaced by the car; the locomotive by the diesel train; the steamship by the motor vessel; and the zeppelin by the airplane. Continue reading

Wall Street Banks Warn Downturn Is Coming

Societe Generale SA

 

  • HSBC, Citigroup, Morgan Stanley say end of market boom is nigh
  • Breakdown in trading patterns is signal to get out soon

HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting evidence that global markets are in the last stage of their rallies before a downturn in the business cycle.

Analysts at the Wall Street behemoths cite signals including the breakdown of long-standing relationships between stocks, bonds and commodities as well as investors ignoring valuation fundamentals and data. It all means stock and credit markets are at risk of a painful drop. Continue reading