Mr. Simon Atkins MBA
CEO, Senior Industrial Disaster Threat Forecaster, Advanced Forecasting Corporation
GLG News by Mr. Simon Atkins MBA, CEO, Senior Industrial Disaster Threat Forecaster
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
-
The Forecast Mix Of Mr. Naimi, El Nino, An Oil Contango And The H1N1 Flu
September 23, 2009
The Old Man and the Sea of Oil | www.rigzone.com
For many a wrong reason, bulls in crude believe that the “Old Man” (Mr. Naimi) is right (in his saying there has been "a fundamental change" in the oil market) when he says that the global economy is recovering. In addition, many oil bulls think the “Little Boy” (El Nino) will remain weak this winter despite most forecasts saying it won’t. To top off the confusing mix of signals, let’s mix in the H1N1 flu. It’s strange, but the mix might be something that needs to go into a risk portfolio.
-
September 24, 2008
Natural Gas Futures Advance As Output Slow To Resume in Gulf | www.bloomberg.com
This article has three main issues: 1) Aubrey McClendon, the CEO of Chesapeake Energy Corp, the second-biggest U.S. independent natural gas producer, says that up to 400 drilling rigs might shut down by the end of 2008; 2) There are worries that natural gas winter supplies will be less than anticipated after hurricanes Ike and Gustav caused havoc in the Gulf. Even though no winter forecast is given, it will be interesting to note what does happen with natural gas prices especially with a couple of early to mid-Fall and mid-winter Canadian blasts well below normal likely occur; 3) Will natural gas decouple from oil?
-
September 17, 2008
Arctic Sea Ice Shrinks To 2nd-Lowest On Record | www.usatoday.com
Human beings boast about having kept sea ice records for just 30 years. Then we have the audacity to say there is an “alarming trend” of arctic sea ice shrinkage. The most frightening aspect is that this ‘theory’ that human activity is causing the majority of sea ice shrinkage is going to have a heck of a negative impact on business especially in the energy, insurance, environmental, and financial sectors over the next five years.
-
Khelil Predicts Oil At $170 By The End Of 2008? Usually I Might Agree, But Not This Time
July 1, 2008
OPEC Leader Khelil Says Dollar Will Drive Oil to $170 | www.bloomberg.com
Chakib Khelil, Algerian Oil Minister and OPEC President, predicts that oil will climb to $170 a barrel by 12/31/08 due to the likelihood that political pressure on Iran as well as other conflicts and turmoil will continue, and on further speculation that the US dollar will see further decline (weakening against the Euro in particular). Khelil, as well as most other OPEC oil ministers, believe that the increasing price of oil is not linked to supply, and that there is more than enough oil in the market to meet the international demand. I have followed Khelil’s public words for over 5 years now, and when he says / forecasts something regarding crude, particularly with regard to its future price, I have calculated that the man is 84% accurate. So it may be a bit of a surprise that I have to disagree with his prediction of $170 by the end of 2008, especially when it almost seems almost a certainty to some that oil will continue rising. My commentary explains the logic.
-
Don't Hold Your Breath Waiting For Mass-Market Hydrogen Car Buyers
June 24, 2008
The Last Car You Would Ever Buy--Literally: Why We Shouldn't Get Excited By The Latest Hydrogen Cars | www.technologyreview.com
If you build it, it’s almost certain the media will come, and they certainly did come in hoards recently to see Honda’s new FCX Clarity. However, the proposed hydrogen fuel cell economy is a fantasy in the media hype consciousness. Why should oil companies (or government) spend tens of billions of dollars building a hydrogen fueling infrastructure, which at best will take away business from their gasoline sales, and at worst will be a complete business loss, assuming as now seems likely, that hydrogen cars never catch on? Sure, hydrogen can be made from carbon-free sources of power like wind energy or nuclear (but has not so far), but so can electricity for electric cars. Hydrogen cars are just outright inefficient, very costly and have little to no supporting infrastructure in place compared with electric cars. In two years, GM and Toyota have promised to deliver plug-in hybrids. That will be a real step closer to a future free of petroleum.
-
Peak Oil: Not A Blessing In Disguise With Regard To Global Warming
June 23, 2008
Global Warming Meets Peak Oil | windnh3.blogspot.com
On the subject of Peak Oil and Global Warming, the article http://windnh3.blogspot.com/search?q=Global+Warming+Meets+Peak+Oil is an intelligent set of ideas on presenting a feasible solution to reversing the energy-climate crisis. 1. We are at or have already passed the peak of cheap conventional oil production. 2. There is little realistic prospect that the conventional oil supply can keep up with current projected demand since it is unlikely in the short-term (despite higher gas prices) that industrialized countries won’t take strong action to sharply reduce consumption, and perhaps more unlikely that China & India won't take strong action to sharply reduce consumption growth. 3. More supply (of oil) is not the answer to our energy-climate crisis. 4. Two primary solutions to Peak Oil: fuel efficiency and plug-in hybrid electric vehicles run on zero-carbon electricity. This is a sane energy policy thacan be a compromise between different groups with different interests.
-
Is The Weather Channel REALLY A Prized Asset?
April 30, 2008
NBC, CBS seen bidding for Weather Channel | www.msnbc.msn.com
Even if you're one of the less than 3% of people that does not get TWC (The Weather Channel) on one of the average household's multiple TV sets blaring away at any hour of the day or night, TWC is the favored channel at airport screens and even in bars. And of course the TWC is in many other languages too. So if you have never seen TWC, you literally have been holed-up in some cave. TWC is almost as ubiquitous as McDonald’s! Everybody is talking about TWC. Everybody wants to own it, now that it is up for sale. So, surely, TWC is a top dog prize, right? I might shock you, but I would not be doing my job if I agreed with the majority of TWC fanatics.
-
Dow To Surprise, Gaining Ground In Hybrid Acquisitions And Innovative Mergers
December 17, 2007
Dow on the Hunt for Acquisitions | www.icis.com
Dow Chemical is on the prowl. And it has the confidence of a Tyrannosaurus Rex. While sources cite Dow's ability to swallow up to 50-60 acquisitions, JVs or divestments, the quantity aspect is really not Dow's main goal. While quality is more important, this time around, it's a measure of three things: 1) adding strengths to its long-term weakness; 2) processing hybrid mixes; and 3) think Middle East.
-
Algerian Minister's Words Provide 80% Confidence In OPEC Predictions
December 17, 2007
Crude-Oil Futures Decline On OPEC Comment | www.marketwatch.com
Listen to what Chakib Khelil says: his words predict the actions at OPEC better than some weather forecasts (excluding AFC's prognostications of course)! Words from OPEC sources almost always stoke a reaction on the Markets worldwide. For the past 5 years, I have "tracked" important comments from OPEC, and have found some very interesting results. Most importantly, it is the Algerian Oil Minister, Chakib Khelil, that provides an eighty percent (80%) confidence in saying what OPEC will likely do -- that is, what he has said ahead of an OPEC meeting does occur 80% of the time.
-
November 21, 2007
Oil Futures Rise Above $98 On Weaker Dollar: Heating Oil Hits New High On Low Inventory And Cold Weather Expectations | www.marketwatch.com
This MarketWatch article is a better report because it does not beat around the bush. The authors interviewed a professor who had some intelligent things to say. First, when the dollar loses value, the demand for crude increases which naturally reduces oil supplies, which causes the price of oil to increase. We have seen from multiple sources in the last few months that OPEC has really not increased supplies -- and it is mainly because they see no need to do so. Call me sarcastic, but the true face of OPEC is a wolf in sheep's clothing: its members say they don't forecast a recession in the USA, but they are expecting it to occur. When oil prices increase and the dollar falls at the same time, economic growth in areas outside of the USA is impacted negatively. Therefore, with dollar depreciation continuing, look for OPEC to invest less and less in additional capacity, thereby reducing supplies overall, causing prices most likely to escalate in stair-like fashion in 2008.
-
The WSJ's Two Contrasting Views On The Sustainability Of $100 Oil
November 21, 2007
Why $100 Oil Can't Float | online.wsj.com
First, I strongly do not agree with the article's assumption that oil at $100 is unsustainable. One-hundred-dollar oil is just another round number, like $70, $80 and $90 -- all so-called "ceilings" of the past that were "incredulously" surpassed when the dollar devalued more, or violence increased more in oil-producing regions of the world, or when OPEC said this or didn't say that. Granted, $100 oil does have an important psychological emphasis and importance attached to it, but interesting enough, not necessarily because of the fact that we are then talking about "triple-digit" prices (and what that means to the global economy), but possibly more because of the fact that the Goldman Sachs energy report that came out well over a year ago calling for $100 oil (double the price back then) in the near future came true! In addition, the all-time inflation-adjusted high of $101 a barrel is again -- just another marker on the way up to many more agreeing that Peak Oil is in the past.
-
What Happens To ADM Regarding Ethanol After The Honeymoon?
November 20, 2007
Ethanol's Uncertain Future Grows Risk For ADM | www.dailyherald.com
When Archer Daniels Midland Co. (ADM) looks at itself in the mirror, it knows itself very well, and foremost, the management knows that its business has had and will continue to have ups and downs, based on commodities, politics, global weather, and a plethora of other risks, some of them not even showing-up on the periscope yet. My best prediction is that ADM will "weather" the storm of biofuel risk, because as far as I can tell from studying the company for a long time, they know what they are doing. I have to say it: America's falling in love with ethanol is akin to a guy or a gal falling in love and proposing marriage after just 2 dates. Good things sometimes DO come about from irrationality but they are usually accompanied by good luck, cosmic guidance and other intangible stuff that most cannot wrap their arms around. To the contrary, a very studious strategy is needed to attempt to predict "Part 2" of the ethanol boom (a.k.a., now that the honeymoon period is over).
-
Global Climate Change: Adverse Effects In The United States Already
November 19, 2007
Global Warming: An Interview with Spencer Weart | quicktolisten.org
It is challenging to attribute specific natural phenomena, such as Global Climate Change (better worded than 'Global Warming' in my opinion due to the cooling witnessed in many parts of the world) to long-term causes, but an increasingly longer list of attributable effects are indeed occurring; in fact, climate change is affecting the USA in more than just subtle ways. Climate change is already affecting many industries, from agriculture to energy, from retail and health to insurance and transport. Of course, the media harps mainly on rising sea levels or glacier retreat, but those may seem a bit "wild" in the USA. However, extreme weather events and the direct and indirect impacts are increasing in the USA. And catastrophes resulting from extreme weather are exacerbated by increasing population densities, especially coastal zones. Altered patterns in agriculture and increased flooding events, as well as weather volatility on energy systems all cause drastic economic impact.
-
Energy And Weather Forecasting: An Indisputable Marriage Of Necessity
November 9, 2007
Energy Risk – Weather Forecasts and Energy Companies | www.riskcenter.com
Energy companies are using weather intelligence in more ways today than ever before, especially as climate change appears to be becoming more volatile. In most of the larger and successful energy firms, as well as those investment firms that trade a substantial amount in energy, weather forecasts -- both short-range and long-term -- assist greatly in strategic functions from planning through finance to operations. While load forecasting is the primary use of weather data, customized and advanced predictions in weather risk management are now used in emergency response and contingency planning. Add in asset management, maintenance planning, trading strategies and specific storm tracking -- and the whole "marriage" of weather intelligence with energy (and other industries) is for the purpose of the-all-vital goal of business continuity. In summary, weather data is being used by increasing numbers in many different ways with very productive results on the bottom line.
-
Many More Adverse Weather Changes Are Likely On The Way
October 23, 2007
Climate Change Potentially Puts Civilization At Risk | www.tennessean.com
Let’s put Gore aside for a second. There lies a potentially very valid and logical theorem of the A=B, and B=C, then A=C type. A). Extreme weather causes environmental degradation. B). Disarray and disruption on an environmental scale causes conflict. C). Therefore abrupt events associated with climate change causes disagreement, discord, struggles, skirmishes, clashes and war. In many ways, addressing climate change seems beyond human capacity. But in reality, the morality of realizing how we can affect it looms larger each month. Climate change is happening almost every day in the USA too, not just in some faraway land. Climate change is not only a weather and environmental and economic issue; climate change is a security issue too. The theme here is to take our technology and reconfigure the economy in how we use energy: a future near-term revolution will change our economy, and on a positive light, it will be a source of jobs, development and opportunity for millions.
-
Warm Winter Cold Winter...Which Will It Be?: A Lot Is In The Cards For Oil
October 18, 2007
Oil Price Risk Is Weather, Not Economics: Goldman | peakoil.com
In Goldman Sachs’ most recent energy report, it says that if the fall into early winter is chillier than usual (by just 10% below normal temps) then that impact could push raise oil an additional $8 to over $93/bbl (granted, their forecast came out when crude was at $85). But that is not necessarily where it gets interesting: the report stresses that abnormal anomalies in the weather pattern will likely be a bigger threat on a near-future oil demand growth curve compared to any near-future economic slowdown, assuming that both the economy and the weather were to slide downhill at the same time (because there would be no way to compare apples to apples if an economic slowdown happened at a different time to an abnormal temperature streak). After reviewing & correlating a lot of weather and oil price data, I discuss below the probability of seeing colder or warmer weather for Q4, and with that information one might have a much better idea on where oil prices are heading (or not).
-
September 20, 2007
Crude Oil Rises Above $82 After U.S. Cuts Rates, Stoking Demand | www.bloomberg.com
Focus away from the speculation of any interest rate cut, and put your attention onto the tropical weather situation for such a minute. Royal Dutch Shell is very carefully watching the potential development of a tropical disturbance off the coast of FL: they are already evacuating 300 workers (with 400 more waiting for evacuation orders) even though a storm has yet to be named. Somebody must have told Shell that the next named tropical entity, Jerry-to-be, could strike production platforms this weekend. That news in and of itself is enough to raise some hairs, and subsequently, oil prices too. So far this hurricane season, the US has had 4 landfalls: even though 3 were tropical storms, and Humberto was a minimal hurricane, it still has been an increasingly active season, and there are plenty of forecasts saying that a total of 6 landfalls are imminent before November. Of all tropical systems that form in September, one-third of them threaten refineries in the Gulf.
-
OPEC Infatuation With Stretching The Truth Causes Oil To Climb Further
September 7, 2007
OPEC May Reject Calls for More Supply With Oil at $76 | www.bloomberg.com
I have followed OPEC closely for years, and I have carefully written down comments that come out of the Cartel, followed by the actions taken, and then of course the market pricing direction of oil -- up or down or steady. It's been a very interesting ride over the years. Metaphorically, OPEC loves to spin round and round, trying to catch its own tail, like some crazed mutt. The Organization hasn't setan official price target since getting rid of the $22-28-a-barrel range over 4 years ago. From that example alone, it has never caught up to reality, and therefore, it never does catch its tail, but continues trying...and as a result, the "dog" gets increasingly exhausted. OPEC has chased so many of its own lies that it is exhausted, and really does not know what way to turn now. As a result, the key implication is that OPEC will likely become more and more unstable, and oil prices -- although they will remain volatile -- will likely creep up and up, until the next confrontation.
-
Market Profits With Weather Derivatives Go Up On The Fear Of Global Warming
August 14, 2007
Hedge Funds Pluck Money From Air in $19 Billion Weather Gamble | www.bloomberg.com
Climate change is pushing weather risk management to new heights. In fact, the market is exploding: as of this past April, trading in weather contracts had a face value of $19 billion at the CME, a jump of 100-fold since 2003. Fears of global climate change are bringing to the table all kinds of companies from power suppliers to ski resorts that want to transfer the risk of adverse weather. As a result, hedge-funds, investment banks, insurers and other firms are devising novel ways of exploiting weather fluctuations by hiring more mathematicians, statisticians and programmers so they can get a piece of the multi-billion market in weather futures – financial instruments tied to everything from hurricanes to freezes and everything in between. Although trades are typically capped at between $1 million and $5 million maximum loss, thereby stemming the amount of failure, the path ahead is to make the caps much larger and increased losses could become larger in a hurry.
-
Expect Increasing Impact To The USA As China's Pollution Grows Exponential
August 7, 2007
The Green Leap Forward: Environmentalism is China’s fastest-growing citizen movement. Beijing isn’t cracking down on these new activists—it’s empowering them. | www.washingtonmonthly.com
Environmental problems now threaten the sustainability of China’s economic expansion. Despite Beijing’s ambitious targets, the country’s environment is getting worse, not better. Beijing vowed in 2002 to reduce sulfur emissions by 10 percent in 3 years, yet they climbed by nearly 30%. China has numerous national laws that sound wonderful on paper but can’t be enforced. The costs of environmental cleanup, property damage, and lost productivity – as reported by China’s State Council (the nation’s highest administrative body) – were at least $200 billion in 2005 (that number is probably conservative), almost 10% of the country’s GDP. Industry releases 2,000 tons of airborne mercury each year, which settles into the soil, contaminating 12 million tons of grain each year and threatening food safety, including China’s $31 billion agricultural export market. Time Magazine reported that only 6% of Chinese agricultural products imported to the United States are free from pollution.
- Subscribe to Updates
-
Leading institutions connect with Simon Atkins through GLG
Most Popular Energy & Industrials News
-
Big-Foot YRC Drops the Other Shoe on Shareholders
November 3, 2009
-
Bombardier Barbs Shows CSeries Can't Cut The Mustard
November 2, 2009
-
New 777 Depends On 787 Success
October 13, 2009
-
Airbus Lost $7.5bn+ Trying to Flog the A350XWB
August 28, 2009
-
Airbus A380 Struggling To Cut The Mustard?
August 24, 2009