What Am I

When Saudi Arabia decided to not decrease the production levels, the bears were really happy. Things became bearish. You must have understood whom am I referring to. Of course, the bears in stock market! If that is what you thought, sorry brother, the world is much bigger than just the bears in stock market. I am referring to the actual bears, the wildly beasty bears. Why would bears have fun when Saudi doesn't reduce its production. And, I meant not even the normal bears... the bigger and beastier Polar bears!! Bears were really happy that the oil prices reduced, thereby the production in Arctic circles would have not happened at the same pace. Hence the ecological balance would not have been disturbed beyond the already created ruffles. While the bears slept through the winters happily and were ready to come out and enjoy the spring, so did the oil prices. And suddenly the biggest predator of all time became active in the polar regions. ...

All of us had a merry time. Enjoyed what all we got, as if there is no need to survive till tomorrow. And, now, when things are evolving and indicating that surviving tomorrow would in fact be a big thing, we are shrugging our shoulders and saying that it ain't us who has caused it. I am speaking about the Emissions and the recent senate vote within US, which rejected the resolution that humans are causing global warming (51-49 against the resolution!!). Is it funny or irony that we feel that the climate change is actually happening, but yet are not willing to accept it.  It is like the girl, who got gang raped, and yet in the court all the accused are vindicated. It is because the semen present inside the girl's vagina may be of the people who gang raped her, but the guilty cannot be charged for the presence of the semen. May be the girl herself willingly did it. We want all, but we don't want to own any. Even I am like this. I wonder, what proof is...

Continuing the discussion from the previous blog ( Is crude price decline good or bad? – Energy Economics 102!!  ), now that the decline in crude is seeing no decline, what next?? a) Acquisitions have become active... First the deal between Baker Hughes and Halliburton. Now the talks between Shell and BP. Wonder why Exxon is lying idle!! This was bound to happen, as companies continue to fight for survival due to working capital issues and also to increase their revenue. This is the right time for big fish eating the small fish. b) Social Planning: Many countries, especially the Opec ones derive much of their revenue from crude oil exports. The decline in crude prices have reduced their GDP by multiple basis points. Below is a chart that explains some of the impacts: Source: World Bank, Oil Rents (% of GDP) As you can see, the crude prices have reduced some of the least developed nations into a state of disarray. Countries like Saudi Arabia where oil revenue ...

Crude prices have declined by more than 20% since June this year, creating turbulences/confusion across various governments. So, the question: Is it good or bad? The answer is: If you are a net oil exporting nation then it is bad for you and if you are a net oil importing nation then it is good for you. Going away from Macro Economics into Micro Economics, All oil producing companies are having a tough time trying to sell their product. Going by the analogy of countries all oil consuming companies should start feeling good. But on the contrary, every one is suddenly concerned whether they are oil producing company or oil consuming company. Why? Many oil/energy consuming companies which are heavily dependent on oil & natural gas as their input have seen a decline of more than 20% in their input costs. So, technically their margins should have gone up. Yes, the margins would go up only for those companies whose sale price hasn't come down as much as the input cost...

North Dakota has seen an increasing trends in various kinds of violence. Drug abuse, domestic violence and various other crimes have seen an upsurge in the recent years, albeit it still is below the country's average. Now, why am I suddenly writing about North Dakota?? This is one state, which has seen a sudden rise in shale gas production, which has more than doubled in a span of a small time. It now has one of the largest proven reserves and is expected to play a strong role in making US, the leading natural gas producer. The new oil & gas has produced lot of jobs, especially in mining, oil & gas technicians and various other jobs and suddenly the unemployment opportunities have become a thing of the past. While I was going through a movie, I realized that many places across the world, which have seen a sudden upsurge in wealth have become some of the most insecure places. For example, m any countries in Africa, Central & Latin America, Middle East, Central ...

In the previous article I mentioned that the Price rise is a shot in the arm and now I also want to justify that it is a shot in the hand. Even while I was contemplating to file a PIL against this price rise, Haryana Govt. whose electricity distribution companies would be affected by this price rise has already challenged the verdict. Just to brief the context again .. the Central Electricity Regulatory Commission, the authority to regulate the price of electricity, has allowed for a pass through of the additional cost of coal in the existing price of electricity. This is considered to a big shot in the arm and hence all the power generation companies' stocks also soared. (Click here for my previous article on this!) If we look at it in detail, there is more to it than just a good news. When Adani bid for the project, though the company had an option, they bid for a fixed tariff that is independent of the fuel prices (Incidentally all the others who lost the bid had opted...

Couple of days ago, one of my friends was asking me what would be the solution to the ailing power sector crisis in India. If we drew Porter's five forces model for the Power sector presently every force is dragging the sector down. Regulatory issues, Human resource issues, Lack of funds, lack of fuel, In adequate price and more to say the least. It looks like a vicious cycle with each leading to the other. So, what was one thing that could be done to revive the sector? The answer was precisely given by the Central Electricity Regulatory Commission by allowing a pass through of increased fuel cost and agreeing to revise the power purchase agreement. No wonder, the stocks of the listed power generating companies soared by more than 5% in a single session, due to the hopes created by this judgement. Infact, this may be the single regulation that will have the maximum impact on the sector. But, how does it impact? When a power generation company is about to set up ...