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Nova Energy Market Insights

Nova Energy Market Insights provides actionable information through the analysis of market trends, pricing models, and industry news. The blog delivers Nova Energy clients a customized perspective into the financial markets that have a direct impact on their business today.

Oil Trades Higher Throughout Iranian Protests

January 4, 2018 | Comments Off on Oil Trades Higher Throughout Iranian Protests

Anti-government protests began in Iran last Thursday with tens of thousands of citizens estimated to have participated. What started as peaceful protests against rising food prices and a poor economy quickly devolved into challenging to ruling Iranian government. At least 20 casualties have been reported and the Iranian Revolutionary Guard was dispatched to three provinces …

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Crack Spread Update: December 2017

January 3, 2018 | Comments Off on Crack Spread Update: December 2017

Our crack spread estimates are constructed through intercommodity analysis by regressing the underlying commodities against other relevant instruments. For closing values on 12/29/2017 The 3-2-1 crack spread increased to $19.01 and is $2.84 above its estimated intercommodity fair value at $16.18. The ULSD crack spread increased to $26.75 and $5.34 above its estimated intercommodity fair …

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Empirical Models Suggest Higher Prices; Risk Reversal Threat Remains High

January 3, 2018 | Comments Off on Empirical Models Suggest Higher Prices; Risk Reversal Threat Remains High

Long-term global supply & demand models suggest current oil prices are underperforming historical values. Regression analysis of 6-month average supply-demand differentials versus WTI futures prices since 2005 have oil near $80 per barrel. An intercommodity model regressing oil prices to correlated commodities also suggests higher prices, although to a lesser extent. As of December 31, …

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Libyan Pipeline Explosion Drives Prices Higher

December 27, 2017 | Comments Off on Libyan Pipeline Explosion Drives Prices Higher

On December 27, 2017, a pipeline operated by Waha Oil Company was targeted by armed men who detonated explosives along a pipeline segment. The attack is expected to reduce production by roughly 100,000 barrels per day. At the end of November total Libyan oil production was at 970,000 bpd. Libyan production highs for 2017 reached …

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