As Rig Counts Rise, So May Saudi Arabia

The latest weekly rig count data produced by Baker Hughes (NYSE: BHI) showed the third straight increase in active North American drilling rigs. The relatively higher price of oil has producers in both the U.S. and Canada expanding operations in June. But that is precisely what Saudi Arabia has been suffering to stop, and so increased investment activity could lead Saudi Arabia to boost production soon. The ripples of such an action might be big, but only if other energy sector dynamics matter less. See this full report at The Snake Also Rises - Saudi Arabia's Response to Rising Rig Counts.

Energy Relative Shares	Week Ended 06-17-16
SPDR S&P 500 (NYSE: SPY)	-1.7%*
United States Oil (NYSE: USO)	-1.8%
iPath S&P GSCI Crude Oil (NYSE: OIL)	-2.5%
United States Natural Gas (NYSE: UNG)	+2.4%
Energy Select Sector SPDR (NYSE: XLE)	-0.0%*
SPDR S&P Oil & Gas E&P (NYSE: XOP)	-0.3%*
Market Vectors Oil Services (NYSE: OIH)	-0.6%
Exxon Mobil (NYSE: XOM)	+0.8%
Chevron (NYSE: CVX)	-0.4%
B.P. (NYSE: BP)	+1.6%
ConocoPhillips (NYSE: COP)	-0.8%
Phillips 66 (NYSE: PSX)	-1.9%
Occidental Petroleum (NYSE: OXY)	-0.7%
Schlumberger (NYSE: SLB)	-1.3%
Halliburton (NYSE: HAL)	-0.6%
Chesapeake Energy (NYSE: CHK)	+2.0%
Pioneer Natural Resources (NYSE: PXD)	-3.2%

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Article interests energy investors including Exxon Mobil (NYSE: XOM), BP (NYSE: BP), PetroChina (NYSE: PTR), Petrobras (NYSE: PZE), Royal Dutch Shell (OTC: RYDAF.PK), Total (NYSE: TOT), Chevron (NYSE: CVX), Repsol (OTC: REPYY.PK), ConocoPhillips (NYSE: COP), Eni SpA (NYSE: E), Sasol (NYSE: SSL), Encana (NYSE: ECA), Suncor (NYSE: SU), Imperial Oil (AMEX: IMO), Statoil (NYSE: STO), Cenovus (NYSE: CVE), Transocean (NYSE: RIG), Penn West Petroleum (NYSE: PWE), Continental Resources (NYSE: CLR), Noble (NYSE: NE), Concho (NYSE: CXO), Diamond Offshore (NYSE: DO), Ensco (NYSE: ESV), Whiting Petroleum (NYSE: WLL), Nabors (NYSE: NBR), Pride International (NYSE: PDE), Helmerich & Payne (NYSE: HP), QEP Resources (NYSE: QEP), Enerplus (NYSE: ERF), Rowan (NYSE: RDC), Cobalt (NYSE: CIE), Patterson UTI (Nasdaq: PTEN), SandRidge (NYSE: SD), Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL), National Oilwell Varco (NYSE: NOV), Baker Hughes (NYSE: BHI), Weatherford International (NYSE: WFT), Cameron (NYSE: CAM), FMC Tech (NYSE: FTI), Oil States International (NYSE: OIS), Superior Energy (NYSE: SPN), Carbo Ceramics (NYSE: CRR), Helix Energy (NYSE: HLX), Pioneer (NYSE: PXD), CNOOC (NYSE: CEO), China Petroleum and Chemical (NYSE: SNP), Ecopetrol (NYSE: EC), Canadian Natural Resources (NYSE: CNQ), Apache (NYSE: APA), Anadarko (NYSE: APC), Devon (NYSE: DVN), EOG (NYSE: EOG), Chesapeake (NYSE: CHK).

The Saudi Arabia Oil Minister Shuffle is Important

The announced change of Saudi Arabia's oil minister over the weekend is important to oil prices and the outlook for the energy complex. However, figuring out exactly how the change will play for oil prices is more complex than it might seem. That much should be apparent after the volatility of oil on Monday. Though, we should not simplify the matter, as other factors are playing importantly for oil as well. See the whole story on Oil Prices - The Saudi Arabia Oil Minister Shuffle is Important.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Article interests energy investors including Exxon Mobil (NYSE: XOM), BP (NYSE: BP), PetroChina (NYSE: PTR), Petrobras (NYSE: PZE), Royal Dutch Shell (OTC: RYDAF.PK), Total (NYSE: TOT), Chevron (NYSE: CVX), Repsol (OTC: REPYY.PK), ConocoPhillips (NYSE: COP), Eni SpA (NYSE: E), Sasol (NYSE: SSL), Encana (NYSE: ECA), Suncor (NYSE: SU), Imperial Oil (AMEX: IMO), Statoil (NYSE: STO), Cenovus (NYSE: CVE), Transocean (NYSE: RIG), Penn West Petroleum (NYSE: PWE), Continental Resources (NYSE: CLR), Noble (NYSE: NE), Concho (NYSE: CXO), Diamond Offshore (NYSE: DO), Ensco (NYSE: ESV), Whiting Petroleum (NYSE: WLL), Nabors (NYSE: NBR), Pride International (NYSE: PDE), Helmerich & Payne (NYSE: HP), QEP Resources (NYSE: QEP), Enerplus (NYSE: ERF), Rowan (NYSE: RDC), Cobalt (NYSE: CIE), Patterson UTI (Nasdaq: PTEN), SandRidge (NYSE: SD), Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL), National Oilwell Varco (NYSE: NOV), Baker Hughes (NYSE: BHI), Weatherford International (NYSE: WFT), Cameron (NYSE: CAM), FMC Tech (NYSE: FTI), Oil States International (NYSE: OIS), Superior Energy (NYSE: SPN), Carbo Ceramics (NYSE: CRR), Helix Energy (NYSE: HLX), Pioneer (NYSE: PXD), CNOOC (NYSE: CEO), China Petroleum and Chemical (NYSE: SNP), Ecopetrol (NYSE: EC), Canadian Natural Resources (NYSE: CNQ), Apache (NYSE: APA), Anadarko (NYSE: APC), Devon (NYSE: DVN), EOG (NYSE: EOG), Chesapeake (NYSE: CHK).

Iranian and Saudi Oil Chess Play

Oil prices jumped 2% Wednesday on OPEC’s indecision and on news of a 4.8 million barrel draw from crude inventory in the latest measured period, according to EIA. High hopes of production increase were fed by recent Saudi chatter, but Iranian dissent should have been transparent. The two nations played an interesting chess match over recent weeks, with both coming out ahead Wednesday, while the West bears economic pain as a result.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Iranian and Saudi Oil Chess Play

When OPEC met Wednesday to discuss the oil market at the highly anticipated 159th conference of the consortium, it was widely expected to increase production. Oil prices had receded well enough ahead of the meeting, led in this direction by Saudi speak regarding its vision of a need for greater production. The result of the meeting was a letdown West, as OPEC ministers failed to find consensus on the subject. Rather, oil’s gatekeepers determined to watch the market over the next six months to get a better measure of its supply/demand balance. As we read between the lines, though, we see a clever Saudi, Iranian chess match at play, with each nation getting exactly what it wanted in the end.

Economic recovery started commodity markets, including energy, on the route of higher pricing. Supported by stalwart demand from emerging giants China and India, a floor held for oil long into economic downturn. Still, as the economic value destroying crises in the U.S., the U.K. and throughout Europe hit fever pitch in early 2009, oil joined all securities assets in panicked trading down to under $40. Thankfully, that panic was short lived, as stocks and commodities both swiftly started on recovery. Only real estate was left to languish further.

Through the early part of 2011, a political fervor gathered steam across North Africa and into the Middle East. This revolutionary movement set instability into the factor pool within the critical oil producing region. It started the already trending higher oil on a burst above $100 from about $90 at the turn of the year. On several occasions in April 2011, oil prices exceeded $120 a barrel, and gasoline prices at the pump in the United States touched $4, setting an unexpected new obstacle in place for a vulnerable economic recovery.

Within his opening remarks to the OPEC ministers, the Conference President and Acting Minister of Petroleum of the Islamic Republic of Iran HE Mohammad Aliabadi, attributed some of the volatility in oil prices through spring to Western trading speculators. He said that it was both the responsibility of supplier nations and consumer bodies to maintain balance and order in oil pricing. OPEC determined there was a speculative premium of at least $15 to $20 in oil. Aliabadi’s accusative statement, not unexpected from an Iranian government representative, ignores the fundamental driver of the nascent volatility, namely civil unrest in Libya and Bahrain, and the risk of its spread to more major producers.

His statement, it seems, gives clue to the basis of Iranian dissent against increasing oil production. Some basis needed to be fit to a predetermined decision from the Iranians, and so why not blame the same group often targeted by the Europeans, speculating profiteers. This argument seemed to win some approval from a biased group – biased to favor higher oil prices. It gave broad reason to maintain current production over increasing levels of activity, an action that should ease some pressure from prices.

But the Iranians are transparent anyway, and have always favored whatever drives higher prices or harms the United States. They see rich pricing as a win/win, driving greater revenues and strangling a threatening West. They ignore, however, the higher cost of gasoline their citizens end up paying for a resource born of domestic earth. This of course adds to its citizenry’s discontent with government, especially after the strained nation, burdened by U.N. sanctions, was forced to lift government subsidies for gasoline buyers these last years.

The Saudi strategy clearly illustrated the brilliant player, as it had vision, seeing moves ahead of the Iranians, and the Americans as well. Over recent weeks, Saudi Arabia, perhaps at the behest of the United States and other Westerners, began publicly declaring its view of need for increased oil production. While I suppose we could attribute the action to U.S. prodding or sincerity, I prefer conspiracy theory.

The Saudi’s were humiliated by WikiLeaks exposing its suggestions to the United States to attack a devious Iran, and to “cut off the head of the snake.” Since this disclosure, which was dangerously lost within the thousands of less lethal breaking news items, the Iranians see the intense interests and activity of their regional rival much more clearly. This, no doubt, played importantly in Iran’s latest prodding of Saudi Arabian and Bahraini Shiites to rise up against their governors.

Besides its exposure to the eyes of the Iranians, Saudi PR has never been in more need of clean up with regard to U.S. relations, and so the peculiarly western allied Arabs become the good guys in the week’s hopeless, predetermined losing battle. Nothing is lost in their positioning for production, but something is gained in the eyes and hearts of the west in seeming to seek it. Meanwhile, oil income streams are well preserved, at least for as long as demand destruction takes to destabilize the West. Finally, and perhaps most importantly to the Arabs, the Saudis must be grinning today, seeing the snake sticking its neck out a little further.



Article interests energy investors including Exxon Mobil (NYSE: XOM), BP (NYSE: BP), PetroChina (NYSE: PTR), Petrobras (NYSE: PZE), Royal Dutch Shell (OTC: RYDAF.PK), Total (NYSE: TOT), Chevron (NYSE: CVX), Repsol (OTC: REPYY.PK), ConocoPhillips (NYSE: COP), Eni SpA (NYSE: E), Sasol (NYSE: SSL), Encana (NYSE: ECA), Suncor (NYSE: SU), Imperial Oil (AMEX: IMO), Statoil (NYSE: STO), Cenovus (NYSE: CVE), Transocean (NYSE: RIG), Penn West Petroleum (NYSE: PWE), Continental Resources (NYSE: CLR), Noble (NYSE: NE), Concho (NYSE: CXO), Diamond Offshore (NYSE: DO), Ensco (NYSE: ESV), Whiting Petroleum (NYSE: WLL), Nabors (NYSE: NBR), Pride International (NYSE: PDE), Helmerich & Payne (NYSE: HP), QEP Resources (NYSE: QEP), Enerplus (NYSE: ERF), Rowan (NYSE: RDC), Cobalt (NYSE: CIE), Patterson UTI (Nasdaq: PTEN), SandRidge (NYSE: SD), Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL), National Oilwell Varco (NYSE: NOV), Baker Hughes (NYSE: BHI), Weatherford International (NYSE: WFT), Cameron (NYSE: CAM), FMC Tech (NYSE: FTI), Oil States International (NYSE: OIS), Superior Energy (NYSE: SPN), Carbo Ceramics (NYSE: CRR), Helix Energy (NYSE: HLX), Pioneer (NYSE: PXD), CNOOC (NYSE: CEO), China Petroleum and Chemical (NYSE: SNP), Ecopetrol (NYSE: EC), Canadian Natural Resources (NYSE: CNQ), Apache (NYSE: APA), Anadarko (NYSE: APC), Devon (NYSE: DVN), EOG (NYSE: EOG), Chesapeake (NYSE: CHK).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

The Saudi Day of Rage Play

As the weekend passed without significant event in Libya, oil prices started the new week backing off recent 29-month highs as stocks simultaneously reconsidered recently sold ground. We suggest readers interpret the action as a rebalancing against heavy pre-weekend betting only, not a turn in trend, at least for the short-term. In fact, as the week progresses anxiety should build around the "Saudi Day of Rage" also called "the Day of Longing" planned for Friday March 11th. The day of rage has decent enough chance of blowing over without turning over the monarchy, but then again, who could have foreseen Egypt. Thus, money should run as the day nears.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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The Saudi Day of Rage Play

The democratic movement across the Middle East and foreign political interests, opposed by the religious rigidity of Saudi Arabia, which would be labeled civil oppression by most of the free world, could take the Arabian Peninsula in a couple directions this month, each being extreme, but only one involving change. The catalyst is a youth inspired movement for a Saudi Day of Rage this Friday March 11.

Several important barriers support the current regime, and have helped to also quell concern here in the west. Since civil protest is banned by Fatwa in Saudi Arabia, and punishable by death, it would take great courage and confidence for the Saudi people to organize in significant numbers. The Interior Minister issued a statement this past weekend that the ban would be strictly enforced against any protestors, after the sparks of revolution glimmered across the sand. Given the embedded investment in and the importance of Arabian oil to the US and the global community, many a commonly concerned ear would likely be turned away from any call by the resistance for aid, a much different position than that which exists in Libya.

However, the Saudis themselves, perhaps borrowing from the earlier actions of the Jordanians, have acted preemptively. The King announced a $37 billion dollar social welfare program, including a 15% increase in the pay of all government workers. This portion of the action might be directly targeting the Shiite dominated oil rich eastern region of the nation. It certainly could serve to keep many off the streets Friday, for fear of spoiling their new winnings. And with unemployment only barely in the double digits in the country, the streets do not call with the same song as the sirens of Egypt. That said, the Saudis have taken careful count of the significant youth segment of its population (about a third) and have offered unemployment support as well. Choosing between bullets and a pay raise will be easier for some than others.

However, globalization, new technologies and social media have opened the world up to Saudi youth as well, to some degree, and opened eyes to a different world. That tempting, happy and love filled place compares against a religiously rigid society that even American Catholic school graduates might fear. Saudi Arabia is one of few countries I will never visit, unless it changes its laws and its rejection of my own faith. If I cannot wear a cross in your home, I will not enter. If freedom of religion is a God given right, the righteousness of one's life is the result of free will. Your author, being a proponent of religious upbringing still recognizes the dangers of the repercussions of oppression versus the effects of education and guidance upon free will.

The words "Constitutional Monarchy" have been uttered by at least one prominent Saudi cleric, jailed and now freed thanks to growing crowds of protestors. As you might imagine, any loss of power is not favored by the ruling family, and so they will give up as little as possible. But how far is the King really willing to go? Would he risk trial by world court for killing his own people like his Libyan cousin-in-crimes against humanity? Mubarak's assets have been frozen, and Gaddafi might face justice akin to Saddam Hussein. There's not much incentive to stand long against a meaningful resistance. However, if it is easier for a camel to pass through the eye of a needle than for a rich man to enter the Kingdom of heaven, then it must likewise be near impossible for Abdullah to give up the kingdom he has created for himself on earth in exchange for the righteous will of the people for self-rule.

In Saudi Arabia, Abdullah will find more believers in claims of Iranian backed factions driving unrest than Gaddafi found in claims of al-Qaeda's factoring. The Shiite minority of Saudi Arabia would like equal representation in an important government. However, I do not believe Saudi Arabians of any sort want to be anything but Saudi Arabian, the land which hosts Mecca and Medina. There is little love lost between Saudi Arabians and Iranians, similarly to the Iraqi Shiite population favoring the Iraqi flag. Of course, the devil (Iranian regime) works subtly, and may offer some minor gain to the minority, which might lead to a separation of state or succession. But the religious tie that binds is the existence of the regarded important holy land that all Muslims are called to be a part of, and so I do not see separation likely. Democracy has a greater chance of succeeding as a result.

It is the great uncertainty around the peninsula and its great importance to the world though, that will have investors likely pulling capital home ahead of Friday. These fires tend to spread over time though, so while one day may not a revolution make a path may be engaged nonetheless. It will at least be interesting to see if Saudi Arabia goes the way of Jordan or the way of Egypt. It would appear the Jordanian model will apply, but capital will fly nonetheless in my humble opinion.



Article interests energy investors including Exxon Mobil (NYSE: XOM), BP (NYSE: BP), PetroChina (NYSE: PTR), Petrobras (NYSE: PZE), Royal Dutch Shell (OTC: RYDAF.PK), Total (NYSE: TOT), Chevron (NYSE: CVX), Repsol (OTC: REPYY.PK), ConocoPhillips (NYSE: COP), Eni SpA (NYSE: E), Sasol (NYSE: SSL), Encana (NYSE: ECA), Suncor (NYSE: SU), Imperial Oil (AMEX: IMO), Statoil (NYSE: STO), Cenovus (NYSE: CVE), Transocean (NYSE: RIG), Penn West Petroleum (NYSE: PWE), Continental Resources (NYSE: CLR), Noble (NYSE: NE), Concho (NYSE: CXO), Diamond Offshore (NYSE: DO), Ensco (NYSE: ESV), Whiting Petroleum (NYSE: WLL), Nabors (NYSE: NBR), Pride International (NYSE: PDE), Helmerich & Payne (NYSE: HP), QEP Resources (NYSE: QEP), Enerplus (NYSE: ERF), Rowan (NYSE: RDC), Cobalt (NYSE: CIE), Patterson UTI (Nasdaq: PTEN), SandRidge (NYSE: SD), Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL), National Oilwell Varco (NYSE: NOV), Baker Hughes (NYSE: BHI), Weatherford International (NYSE: WFT), Cameron (NYSE: CAM), FMC Tech (NYSE: FTI), Oil States International (NYSE: OIS), Superior Energy (NYSE: SPN), Carbo Ceramics (NYSE: CRR), Helix Energy (NYSE: HLX), Pioneer (NYSE: PXD), CNOOC (NYSE: CEO), China Petroleum and Chemical (NYSE: SNP), Ecopetrol (NYSE: EC), Canadian Natural Resources (NYSE: CNQ), Apache (NYSE: APA), Anadarko (NYSE: APC), Devon (NYSE: DVN), EOG (NYSE: EOG), Chesapeake (NYSE: CHK). Defense shares: Northrop Grumman (NYSE: NOC), Raytheon (NYSE: RTN), Alliant Techsystems (NYSE: ATK), Lockheed Martin (NYSE: LMT), Boeing (NYSE: BA), NYSE: IWM, NYSE: TWM, NYSE: IWD, Honeywell (NYSE: HON), General Dynamics (NYSE: GD), Rockwell Collins (NYSE: COL), Goodrich (NYSE: GR), L-3 Communications (NYSE: LLL), SAIC (NYSE: SAI), FLIR Systems (Nasdaq: FLIR), EMBRAER (NYSE: ERJ), Spirit Aerosystems (NYSE: SPR), BE Aerospace (Nasdaq: BEAV), TransDigm Group (NYSE: TDG), CAE (NYSE: CAE), Hexcel (NYSE: HXL), Esterline Technologies (NYSE: ESL), Teledyne Technologies (NYSE: TDY), Curtiss-Wright (NYSE: CW), HEICO (NYSE: HEI), Triumph Group (NYSE: TGI), Orbital Sciences (NYSE: ORB), AAR Corp. (NYSE: AIR), Kaman Corp. (Nasdaq: KAMN), AeroVironment (Nasdaq: AVAV), Smith & Wesson (Nasdaq: SWHC), DigitalGlobe (NYSE: DGI), GenCorp (NYSE: GY), Hawk (AMEX: HWK), LMI Aerospace (Nasdaq: LMIA).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.