I just wrote a story on palladium for Energy & Resources Digest, which should run this weekend. Here's a chart ...
(updated chart)
What is driving this move in palladium? It's NOT as Bloomberg insists, China's move to promote electric cars. Platinum isn't used in electric cars. FAIL for Bloomberg.
No, it's something else. And for that, you'll have to tune in to Energy & Resources Digest on Saturday.
Hope your Thursday is going well. Check out that action in gold. My chart from Sunday is working out nicely (for a change). Keep your eye on overhead resistance for gold around $1,160.
Sean
Check out a performance chart since the beginning of the year ...
Here are some recent articles I've written.
It's San Andreas' Fault
Excerpt:
Last week, the EIA said that it expects to release a new detailed estimate on the recoverable amount of oil from the Monterey Shale in California. You could hear jaws dropping all over the California oil patch when the EIA announced its preliminary findings. According to the EIA’s revised estimates, the Monterey Shale contains only about 600 million barrels of oil. That’s 96% less than the 13.7 billion barrels previously predicted.
In one stroke, the EIA put an end to California Dreamin’ about vast, new oil wealth. The EIA’s revision also slashed America’s total recoverable shale oil estimate by two-thirds. That’s because the Monterey Shale represents a huge part of America’s undeveloped shale oil deposits.
“Not all reserves are created equal,” EIA Administrator Adam Sieminski told reporters at the Financial Times and Energy Intelligence Oil & Gas Summit in New York. “It just turned out it’s harder to frack that reserve and get it out of the ground.”
It’s true things look bad. However, the EIA’s latest report is not the last word on this topic. Let’s take a brief look at the challenges facing drillers in the Monterey Shale, why the EIA changed its mind on how much oil can be recovered… and why I think they’ll change their minds AGAIN down the road.
The Rodney Dangerfield of Metals Gets Respect
Excerpt:
Palladium recently jumped to $830 an ounce. Soon, it could challenge its 2011 highs just above $860. And once it gets above that, I think we’ll easily see another 10% rally. But how about longer term?
So let’s take a look at three factors that are greatly affecting the palladium supply and demand picture.
The Nickel Supply Squeeze Is Just Getting Started
Excerpt:
... the supply/demand squeeze powering nickel's surge is likely to get stronger.
The biggest user of nickel is China. Nickel is used to make stainless steel, and China makes a lot of it. Stockpiles of nickel in China are falling. According to Deutsche Bank, China's nickel stockpile is now down to one month's supply, a drop of 26% in just a month.
A big supply crunch is coming for China.
What's more, the global nickel market will swing to a deficit of 132,200 tons next year from a surplus of 13,800 tons this year, according to Citigroup.
What will that do to prices? The price of nickel was recently $8.91 per pound, or $19,615 per metric ton. Citi forecasts nickel prices to rise to more than $30,000 per metric ton next year. That's a rise of more than 50%!
The Oil Boom Has Reached a Tipping Point
Excerpt:
U.S. exports of gasoline, diesel and other petroleum products jumped to a record 4.3 million barrels per day (bpd) at the end of last year, according to the Energy Information Administration (EIA). That's more than twice the 2.1 million bpd of petroleum products that the U.S. imported.
As a result, total U.S. net imports of energy declined last year to their lowest level in more than 20 years!
Here's a chart of what's working, and what's not, using a performance chart. I would put platinum on the chart, but its recent performance is indistinguishable from gold. Silver was doing better in September and October, but over this time frame, its performance tracks palladium.
(Updated chart)
See my analysis on natural gas from earlier this week.
Good luck out there.
