Out Fox The $treet

Interesting article from the Financial Times about a subject I've wondered about as well. Will the surge in land prices for US shale oilfields last? Every time you read an article, one wonders why Chesapeake Energy (CHK) can't translate purchases of acres at $1,400 that is sold for $15,000 into huge stock price gains. Also, it amazes me that none of the major energy companies with vast cash hoards aren't able to beat CHK to the punch for cheap acres. Ultimately the issue with Chesapeake is that it requires a ton of debt to grab all this land and hold onto it until it is able to drill and recover oil or nat gas. The big surge in nat gas production from these shale plays have already led to a price collapse in the domestic market. The recent expansion into oil plays isn't likely to cause the same collapse in price as oil is an international market. If nat gas was an international market as well, prices wouldn't have collapsed. Asian and European users pay doubl...

Most investors have probably already heard about the new oil potential in Ohio via the Utica Shale. Great article in Forbes about the potential for thousands of jobs in this struggling manufacturing state. Would imagine that many a laid off employee in the manufacturing sector could potentially shift to the oil services sector. Sure it'll take training, but the skill set would appear similar. Now if Obama's job ideas would just include money for retraining unemployed workers instead of short term tax breaks. Why does the government always come up short term ideas? Or maybe Obama could just come up with an energy plan to take advantage of the new abundant oil and nat gas resources in the US. Sure he can for through with his green energy plan, but that is a long term plan for 2020 or 2030. What this country needs is a plan to make it to the 2020s living off the fuels already available.  On a cautionary note, the more I read about the oil shale plays including our recent in...

Retail gas prices remain very elevated as seen in the chart below from Chartfacts.com. Beginning around May when oil prices plunged, gas prices remained relatively steady. Only falling as oil continued dropping below $100. According to the chart, the average price of gas needs to fall $0.30 to equal the fall in oil prices. Supposedly a lot of the price difference is caused by the price of Brent crude being higher than the Nymex/WTI quoted version. The main culprit for the price difference is the congestion and glut in Cushing, OK. Evidently they've built more pipelines coming into Cushing than ones leaving. Nice! Basically America has increased oil production to such an extent that now consumers aren't even getting the advantages. Brilliant! So while Congress is busy debating the debt ceiling our energy policy continues to be less than desirable. Wonder how many Congress members read the announcement from Chesapeake Energy (CHK) on the Utica Shale discovery ? Policy discu...