Friday 18th August 2017

Resource Clips


Posts tagged ‘oil’

Visual Capitalist: How commodities performed in H1 and why they’re very cheap

July 5th, 2017

by Jeff Desjardins | posted with permission of Visual Capitalist | July 5, 2017

If you’re looking for action, the commodities sector has traditionally been a good place to find it.

With wild price swings, massive up-cycles, exciting resource discoveries and extreme weather events all playing into things, there’s rarely a dull day in the sector. That being said, it’s hard to remember a more lacklustre period for commodities than the last couple of years.

For commodity bulls, the good news is that the sector is no longer tanking. The bad news, however, is that all the recent action has been in relatively niche sectors, as metals like cobalt, zinc and lithium all have their day in the sun.

At the same time, the big commodities (gold, oil, copper) have all slid sideways, having yet to revisit their former periods of glory.

Commodity winners so far

Before we highlight why commodities could still be cheap, let’s look at recent performance to get some context. Here are the commodities that have positive returns in H1 2017 so far:

How commodities performed in H1 and why they’re very cheap

 

Palladium is the best performer in 2017 so far, and it has now almost passed platinum in price. That would be the first time since 2001 that this has happened, and for the stretch of 2007 to 2012 it was even true that palladium traded at a $1,000 deficit to platinum.

Agricultural goods like rough rice, lean hogs, oats and wheat have also gotten more expensive so far this year. Meanwhile, metals like gold, copper and silver have seen modest gains—but only after dismal performances in the last part of 2016.

The losers so far

Here is the scoreboard for the commodities in negative territory, with the most noticeable losses in sugar and energy.

How commodities performed in H1 and why they’re very cheap

 

Are commodities cheap?

From the post-crisis bottom in 2009 until today, the S&P 500 is up a staggering 215.4%.

During that same timeframe, most major commodities crashed and then went sideways. The Goldman Sachs Commodity Index (GSCI) is down roughly 31.2%, which is a strong juxtaposition to how equities have done.

This extreme divergence can be best seen in this long-term chart, which compares the two indices since 1971.

How commodities performed in H1 and why they’re very cheap

 

In other words: Despite the lack of action in commodities that we noted earlier, the sector has never been cheaper relative to equities, even going back 45 years.

That means that there could be some much-needed action soon.

Posted with permission of Visual Capitalist.

Infographic visualizes the world’s deepest oil well

March 20th, 2017

Infographic by Fuel Fighter | text by Jeff Desjardins | posted with permission of Visual Capitalist | March 20, 2017

In the world’s deepest gold mine, workers venture four kilometres below the Earth’s surface to extract gold from a 0.8-metre-wide vein of ore.

While these depths are impressive, mining is limited by the frailty of the human body. Going much deeper would be incredibly dangerous, as limitations such as heat, humidity, logistics and potential seismic activity all become more intense.

Luckily, the oil industry does not have such human restrictions and drilling deep into the Earth’s crust is instead limited by a different set of circumstances—how deep can the machinery and technology go before the unfathomable heat and pressure renders it inoperable?

The world’s deepest oil well

This infographic comes to us from Fuel Fighter and it helps visualize the mind-boggling depths of the world’s deepest oil well, which is located in a remote corner of eastern Russia.

 

Visualizing the world’s deepest oil well

 

The world’s deepest oil well, known as Z-44 Chayvo, goes over 12 kilometres into the ground—equal to 15 Burj Khalifas (the tallest skyscraper) stacked on top of each other. That’s also equal to twice the record height for air balloon flight.

Perhaps more importantly to the operator, Exxon Neftegas Ltd, the wells on this shelf are expected to produce a total of 2.3 billion barrels of oil.

That’s some serious depth

But even before the Z-44 Chayvo Well and other holes like it were drilled on the eastern side of Russia, the famous Kola Superdeep Borehole set the record for drill depth.

Located in western Russia, this time just 10 kilometres from the border with Norway, the Kola Superdeep Borehole was rumoured to have been discontinued in 1992 because it actually reached “hell” itself. At its most extreme depth, the drill had pierced a super-hot cavity and scientists thought they heard the screams of damned souls.

All folklore aside, the Kola Superdeep Borehole is super interesting in its own right. It revealed many important things about our planet and it still holds the record for depth below the surface.

Read more about deep underground mining.

Infographics: Think again about natural resources

February 23rd, 2017

Among the news from Resource Works is the #ThinkAgain campaign, a series of infographics that “set the record straight on myths, misunderstandings, ‘alternative facts’ and fake news about resources.”

Here’s the current batch. Resource Works promises more to come.

Infographics: Think again about natural resources

Infographics: Think again about natural resources

Infographics: Think again about natural resources

Infographics: Think again about natural resources

Infographics: Think again about natural resources

Infographics: Think again about natural resources

Infographics: Think again about natural resources

Infographics: Think again about natural resources

Infographics: Think again about natural resources

Infographics: Think again about natural resources

Infographics: Think again about natural resources

Infographics: Think again about natural resources

Infographics: Think again about natural resources

Posted with permission of Resource Works, a non-profit research and advocacy organization “supporting a respectful, fact-based public dialogue on responsible resource development in B.C.”

Infographic: Countries of origin for raw materials

November 16th, 2016

Graphic by BullionVault | text by Jeff Desjardins | posted with permission of Visual Capitalist | November 16, 2016

Every “thing” comes from somewhere.

Whether we are talking about an iPhone or a battery, even the most complex technological device is made up of raw materials that originate in a mine, farm, well or forest somewhere in the world.

This infographic from BullionVault shows the top three producing countries of various commodities such as oil, gold, coffee and iron.

Infographic Countries of origin for raw materials

 

The many and the few

The origins of the world’s most important raw materials are interesting to examine because the production of certain commodities is much more concentrated than others.

Oil, for example, is extracted by many countries throughout the world because it forms in fairly universal circumstances. Oil is also a giant market and a strategic resource, so some countries are even willing to produce it at a loss. The largest three crude oil-producing countries are the United States, Saudi Arabia and Russia—but that only makes up 38% of the total market.

Contrast this with the market for some base metals such as iron or lead and the difference is clear. China consumes mind-boggling amounts of raw materials to feed its factories, so it tries to get them domestically. That’s why China alone produces 45% of the world’s iron and 52% of all lead. Nearby Australia also finds a way to take advantage of this: It is the second-largest producer for each of those commodities and ships much of its output to Chinese trading partners. A total of two-thirds of the world’s iron and lead comes from these two countries, making production extremely concentrated.

But even that pales in comparison with the market for platinum, which is so heavily concentrated that only a few countries are significant producers. South Africa extracts 71% of all platinum, while Russia and Zimbabwe combine for another 19% of global production. That means only one in every 10 ounces of platinum comes from a country other than those three sources.

Graphic by BullionVault | posted with permission of Visual Capitalist.

Ever deeper, ever higher

October 11th, 2016

China takes on three mining frontiers, but not without competition

by Greg Klein

This is the first of a two-part feature. See Part 2.

Nearly a century before laggard Europeans got around to their Age of Exploration, Chinese merchant vessels had been travelling at least as far as eastern Africa, returning with vast shiploads of treasure. The voyages ended abruptly in 1433, for reasons debated by historians, and rulers ordered a massive merchant fleet destroyed. That largely left the New World to Westerners, evidently not a policy China intends to repeat. Now the country plans the conquest of three new frontiers: “deep underground, deep sky and deep sea.”

Such are the goals of Three Deep, a five-year plan announced last month by the country’s Ministry of Land and Resources. China’s funding R&D that would take mineral exploration deeper than ever on land and at sea, while exploring from outer space as well. But formidable as they are, the three frontiers aren’t completely uncharted. The expansionist, resource-hungry regime will have competition.

China takes on three mining frontiers, but not without competition

By 2020 the country wants the ability to mine land-based deposits that begin two kilometres in depth, find minerals at three kilometres, and identify oil and gas at 6.5 to 10 kilometres, the South China Morning Post reported October 5. China intends to develop underground communities too, although those details were even more scarce.

China also plans technology for undersea mineral exploration and mining, working towards the ability to send a remotely operated vehicle (ROV) to 11 kilometres’ depth by 2020, the paper added. That’s slightly beyond the deepest known point of any seabed. The country has already sent an ROV seven kilometres deep in the Pacific. In the Indian Ocean, Chinese have been studying seabed mining technology on a 10,000-square-kilometre area south of Madagascar, the SCMP stated.

Going from the depths to the heavens, China wants 27 satellites in orbit by 2020 to conduct surveys and research, partly on terrestrial mineral potential. The country also has expressed ambitions for moon and Mars landings, and for sending its citizens into space. A Chinese competitor to SpaceX, One Space Technology, plans its first commercial rocket launch in 2018.

SpaceX, of course, retains its Elon Musk confidence even after the Falcon 9 rocket blew up prior to take-off last month, destroying a $300-million communications satellite. Having received NASA contracts to ferry people and cargo to the International Space Station, Musk continues to talk about sending colonists to Mars. He’s already sent some lithium stocks to the moon.

Probably among the more credible companies talking about mining the heavens are Planetary Resources and Deep Space Industries. Both develop technology for NAFTA and both have signed MOUs with Luxembourg that would help finance mineral exploration and mining of near-Earth asteroids. The Grand Duchy, a global leader in satellite communications, has announced its willingness to invest in extra-terrestrial mining to become a world leader in other worlds. The country also plans to create a legal framework for its outer space endeavours, after the U.S. passed legislation giving Americans the right to keep any extra-terrestrial commodities they extract.

Deep Space says it will launch its Prospector X experimental asteroid explorer “in the near future.” By the first half of the next decade, Planetary expects to begin small-scale extraction of asteroid water for its oxygen and hydrogen.

Already a nine-year veteran of the main asteroid belt, NASA’s Dawn craft now orbits the dwarf planet Ceres after having studied the proto-planet Vesta. Last month the space agency’s NASA OSIRIS-REx set off for the asteroid Bennu, with arrival expected in 2018 and return in 2023.

JAXA, the Japan Aerospace Exploration Agency, has been to that neighbourhood and back after its Hayabusa craft delivered asteroid samples in 2010.

Last month the European Space Agency ended the 12-year, eight-billion-kilometre odyssey of its Rosetta craft, which spent the last two years studying a comet. In a joint project with Russia’s Roscosmos, the ESA expects to land a capsule on Mars on October 19 to search for signs of previous life.

Russia’s moon exploration program sees potential for minerals delivered by asteroid impact. “In the next few years, all scheduled moon flights will focus on its southern polar region, where low-temperature reservoirs of rare earths, as well as unknown volatile substances, have been detected,” Industrial Minerals quoted Vladislav Shevchenko of Moscow State University. Given higher commodity prices, mining could be viable, he added.

Boeing NYSE:BA recently matched Musk’s big talk as CEO Dennis Muilenburg spoke about sending holidayers to orbiting tourist traps prior to linking up with the Red Planet. “I’m convinced the first person to step foot on Mars will arrive there riding a Boeing rocket,” Bloomberg quoted him last week. As a NASA contractor Boeing competes with SpaceX on its own and through the United Launch Alliance, a JV with Lockheed Martin NYSE:LMT.

This is the first of a two-part feature. See Part 2.

The non-profit group Resource Works points out green energy’s reliance on oil, gas and mining

July 18th, 2016

…Read more

Cardiff Energy turns green with Quebec lithium project

June 22nd, 2016

by Greg Klein | June 22, 2016

Believing there’s more lithium to be found in Quebec’s James Bay region, Cardiff Energy TSXV:CRS announced its Eastmain River acquisition on June 22. Vended by Zimtu Capital TSXV:ZC, the 1,160-hectare property sits in the lower Eastmain Greenstone Belt, where “outcrop exposure is extraordinary in the area with pegmatites crosscutting at surface,” the company stated.

Cardiff Energy turns green with Quebec lithium project

“The Eastmain River area consists of a four-kilometre zone of irregular crosscutting dykes of spodumene pegmatites, up to 60 metres wide and over 100 metres long,” Cardiff added. Historic, non-43-101 documentation reports 277 samples averaging 1.7% Li2O. The property has yet to be drilled.

Eight kilometres south of Cardiff’s project, ASX-listed Galaxy Resources’ James Bay project has an indicated resource of 11.75 million tonnes averaging 1.3% and an inferred category of 10.47 million tonnes averaging 1.2% Li2O in a surface deposit with open pit potential.

The Eastmain River project sits 2.5 kilometres from a highway, with a gas station, accommodations and helicopter support eight kilometres southwest, as well as an airport 30 kilometres away.

Cardiff also announced suspension of work on its 70%-held Clayton #1H oil well in Texas pending additional funding or JV interest.

Read interviews with Chris Berry and Jon Hykawy discussing energy metals.

June 22nd, 2016

Tesla announces plan to acquire SolarCity to form an Elon Musk (not so) super group Equities.com
What Brexit is all about: Taxation (and regulation) without representation Stockhouse
Three bullish views on NexGen Energy Streetwise Reports
Let’s talk prices: Graphite, lithium, fluorspar and TiO2
Industrial Minerals
Analyse this: Central bank intervention GoldSeek
Limestone: Commodity overview Geology for Investors
Lithium penny stock soars on sample results SmallCapPower
Elon Musk: Our lithium-ion batteries should be called nickel-graphite Benchmark Mineral Intelligence
Lithium in Las Vegas: A closer look at the lithium bull The Disruptive Discoveries Journal
A tale of two gluts: Oil and ore approach $50 on opposite paths NAI 500

June 21st, 2016

What Brexit is all about: Taxation (and regulation) without representation Stockhouse
Three bullish views on NexGen Energy Streetwise Reports
Let’s talk prices: Graphite, lithium, fluorspar and TiO2 Industrial Minerals
Analyse this: Central bank intervention GoldSeek
Limestone: Commodity overview Geology for Investors
Texas is waging a new battle—against the entire financial system Equities.com
Lithium penny stock soars on sample results SmallCapPower
Elon Musk: Our lithium-ion batteries should be called nickel-graphite Benchmark Mineral Intelligence
Lithium in Las Vegas: A closer look at the lithium bull The Disruptive Discoveries Journal
A tale of two gluts: Oil and ore approach $50 on opposite paths NAI 500

June 20th, 2016

Three bullish views on NexGen Energy Streetwise Reports
Let’s talk prices: Graphite, lithium, fluorspar and TiO2 Industrial Minerals
Analyse this: Central bank intervention GoldSeek
Are we nearing the end of the EU experiment? Stockhouse
Limestone: Commodity overview Geology for Investors
Texas is waging a new battle—against the entire financial system Equities.com
Lithium penny stock soars on sample results SmallCapPower
Elon Musk: Our lithium-ion batteries should be called nickel-graphite Benchmark Mineral Intelligence
Lithium in Las Vegas: A closer look at the lithium bull The Disruptive Discoveries Journal
A tale of two gluts: Oil and ore approach $50 on opposite paths NAI 500