I have been a longtime supporter of including gold in diversified portfolios. Gold is a safe-haven asset, an inflation and currency hedge, and a hedge against geopolitical turmoil and general market turbulence.  It is an insurance policy of sorts. When everything else is down, gold is often up. Gold’s counterbalancing effects can dull the pain of a market rout. We have seen shades of gold’s counterbalancing power over recent weeks as both stocks and bonds have sold-off while gold prices have risen. I’ve long been an outspoken advocate of owning gold (I say owning because I buy gold … [Read more...]

A promising zinc-based battery technology could revolutionize the economics of energy storage. Ivan Penn reports in The New York Times about the innovations of Patrick Soon-Shiong and Nant Energy. He writes: Over the past six years, 110 villages in Africa and Asia received their power from solar panels and batteries that use zinc and oxygen. The batteries are the basis of an innovative energy storage system created by NantEnergy, a company owned by Patrick Soon-Shiong, a biotech entrepreneur and surgeon originally from South Africa. Thomas Edison tried to develop batteries made with zinc … [Read more...]

Canadian railroads are rapidly hiring new employees to keep up with record demand for transporting crude oil by rail. Deborah Jaremko writes for JWEnergy: The price of Canadian heavy crude is currently trading at a whopping $30-plus per barrel less than U.S. light oil, but the spread should narrow as more crude by rail comes online, analysts said on Thursday. Crude by rail traffic has hit record levels this year and is expected to continue increasing until additional export pipeline capacity is completed out of western Canada. Carloads reached 200,000 bbls/d for the first time earlier … [Read more...]

According to Energy Transfer Partners CEO Kelcy Warren, making money in pipelines right now is so easy a monkey could do it. That follows a strong earnings season for pipelines, a booming U.S. oil industry, and regulatory relief from the Trump administration. In The Wall Street Journal, Ryan Dezember reports on these developments, writing: From a peak in August 2014, the Alerian MLP index lost 63% before bottoming out in February 2016. MLP shares rebounded somewhat alongside rising U.S. oil prices but were dealt a fresh blow in March. On March 15, the Federal Energy Regulatory … [Read more...]

After shortages of sand supplies slowed down Permian Basin oil production two years ago, so many companies have begun efforts to mine sand that the Texas oil patch may soon be overwhelmed with sand supplies. At The Wall Street Journal, Christopher Matthews explains the possible over-investment in the dunes of the West Texas desert. He writes: Now, around 20 sand mines are set to be active in the Permian Basin, America’s most active oil field, by year’s end, and even some of those who put hundreds of millions of dollars behind these startups predict they won’t all survive. Sand is a key … [Read more...]

Rob Taylor reports in The Wall Street Journal that the long dry spell in Australia is putting farmers at risk of going completely out of business. He writes: A severe drought has gripped an area of Australia more than twice the size of Texas, turning normally fertile crop areas into dust bowls, draining water reserves and leaving wine-producing regions parched. Hungry kangaroos are turning up in cities. Millions of dollars of farm equipment is idle across vast expanses of agricultural land in the continent’s east, and farmers are wondering if they should bother planting summer … [Read more...]

Delays in building new pipelines from Canada's oil sands fields have generated record shipments of oil-by-rail in May in Canada. The Edmonton Sun reports: New data from the National Energy Board shows Canadian oil companies shipped an average of 198,788 barrels of oil per day on railway cars in May, the latest month for which data is available, marking a record high and a 42 per cent increase over the 130,916 bpd shipped on rail in the same month a year earlier. Over the same period, Canadian oil production is expected to have risen to 4.5 million bpd, from 3.9 million bpd according to an NEB … [Read more...]

According to Kim Mackrael of The Wall Street Journal, tight trade links make it unlikely that tariffs will change business behavior in metal-intensive industries. She writes: Lakeshore, ONTARIO—Across the border from the U.S. auto capital of Detroit, a Canadian company here buys aluminum made at smelters in Quebec using bauxite from Africa or Brazil that Ford Motor Co. puts in America’s best-selling pickup, the F-150. The tightly woven production chain illustrates the U.S. dependence on aluminum from Canada that many say is unlikely to change despite recent metals tariffs the Trump … [Read more...]

Off the coast of Guyana, Exxon Mobil Corp. has found what appears to be a multi-billion barrel oil patch. The find could be a just what Exxon needs, and could put Guyana among the major oil producing countries in the world by generating even more production than OPEC members Equatorial Guinea and Gabon. Bloomberg's Kevin Crowley reports: Exxon Mobil Corp. increased its estimate for a giant offshore oil discovery in Guyana by 25 percent yesterday, but it may just be the beginning. Some 8 of 10 exploration wells have struck oil since 2015 and Exxon has identified a further 19 targets to … [Read more...]

There is a growing body of evidence to support the theory that China's economy is slowing down. One of the clearest signs is the recent drop in metals prices. If the Chinese economy spirals down, it could tank the market for metals and other commodities along with it. Neil Hume reports for the FT: Mining stocks were under pressure on Thursday as selling of industrial metals intensified on concerns about demand from China, the world’s biggest consumer of raw materials. Copper fell 2.5 per cent and slipped below $6,000 a tonne for the first time in a year, while zinc was off 3.9 per cent at … [Read more...]