Crude Oil

Did you miss the recent rally in crude oil?

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April 2018 turned out to be a favorable month for crude oil prices. Rising geopolitical tensions in Syria and the Middle East coupled with higher demand and lower inventories aided a 5.6% rally in the crude oil prices in the past month. Moreover, the expectations of amicable resolution on trade war between the United States and China also supported a rise in crude oil prices.

FiND, alternative data platform has captured the key news items which supported rally in crude oil. At the same time, Heckyl platform has accurately captured underlying positive news sentiment around crude oil (Image 1).

Oil News
[Image 1: Crude Oil News Flow during April 2018]  Read the rest of this entry »

Extremely bullish news sentiment supports oil price rise: FiND

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Crude oil price has demonstrated a strong rally over the past 5-months. On Thursday, crude oil WTI futures jumped above USD 66 per barrel for the first time in more than three years. The rally in crude oil prices was supported by OPEC’s extension of production cut, strong demand and continuous drop in the US stockpiles of crude oil.

FiND, an alternative data platform developed by Heckyl showed the demand for crude oil has been outstripping supply consistently since February last year (Image 1).

Oil Demand Supply
[Image 1: Crude Oil Supply-Demand Balance]

At the same time, the US crude oil inventories have been witnessing downtrend for the past 10-months (Image 2).

US Oil Inventory
[Image 2: US Crude Oil Inventory] Read the rest of this entry »

Oil prices can play spoilsport to airline stocks rally

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2017 was a fantastic year for airline stocks as relatively lower oil prices, higher demand and improved operational performance brightened the outlook for the sector. However, after a solid performance last year, the global airline industry is bracing for an oil shock in 2018. The recent run-up in oil prices, if sustained, may exert a significant drag on airlines profitability in this year.

Stock returns
[Image 1: Watchlist highlights stock returns for leading airlines as on Jan. 24, 2018
(*For US-based companies, returns as on Jan. 23, 2018)]

In 2017, jet fuel prices averaged at USD 1.5 per gallon for the first 3-quarters. A spike in crude oil moved jet fuel average price to USD 1.74 per gallon in Q4’17 from USD 1.59 per gallon in Q3’17. The impact of 9.4% sequential rise in jet fuel prices in Q4 was clearly visible in recently announced quarterly numbers of leading airlines.

For instance, Delta Air Lines witnessed an 8% y-o-y drop in net income in Q4’17 owning to 21% rise in fuel cost. At the same time, CASM (cost per available seat mile) – Fuel for Delta rose significantly by 38.67% sequentially to USD 0.03 in Q4’17.

Delta - CASM Fuel
[Image 2: Compare screen highlights trend for Delta Air Lines’ CASM – Fuel and Jet Fuel] Read the rest of this entry »

Oil & gas companies Q4 news flow most positive in past 8-quarters

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Total SA leads positive news coverage among top 10 oil & gas companies in 2017

Global oil & gas companies witnessed a significant improvement in underlying news sentiment for December 2017 quarter. Crude oil prices are at its highest level in past 8-quarters (Image 1), which has led to improvement in prospects of earnings, production and growth-oriented activities for the oil & gas companies. As a result, news coverage on top 100 global oil & gas companies during Q4 was most positive in the past 8-quarters.

OIL PRICE TREND
[Image 1: Crude Oil Price Trend]

FiND, an alternative data platform developed by Heckyl has accurately captured movement in news sentiment for the oil & gas sector. For the past 8-quarters, our positive to negative news ratio for top 100 oil & gas companies showed near perfect positive correlation (0.95) with Dow Jones Global Oil & Gas index (Image 2).

Dow Jones Global Oil & Gas - Positive to Negative News Ratio
[Image 2: Dow Jones Global Oil & Gas v/s Heckyl Positive to Negative News Ratio]

 (The ratio value higher than 1 indicates mostly positive news sentiment. On the other hand, the ratio value lower than 1 signals broadly negative news sentiment.) Read the rest of this entry »

What’s moving the commodities market?

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In the last 1-month, correlation between the prices of Gold, Crude Oil, and Copper increased significantly amid recent uptrend in the prices.

Gold_Copper_Crude_August 1, 2017
Read the rest of this entry »

Should the Fed hike rates? Cues for the Global Markets ahead : Part I – Thinking like the Fed

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US-federal-reserveWith low inflation and falling inflation expectations, the Federal Reserve is believed to execute a rate hike this year. The funds rate is the mechanism the Fed uses to regulate short-term interest rates in the economy, which in turn moves across the yield curve.

The Fed has two objectives: stable prices and firm economic growth. The Central banks stimulate the economy by cutting rates when the economy is slowing down. While lower rates can bring economic growth, they mostly come with an inevitable consequence: Inflation.  Read the rest of this entry »