Aug 1, 2008|
Oil production, inflation & more...
How hard is it to maintain oil production?
Surely, that's the question the folks at Exxon, the world's largest oil and gas company, must be asking after the company reported nearly a 8% decline in production, the largest in over a decade. The decline can be attributed to nationalisation of its assets in Venezuela, a strike by Nigerian workers and share of output taken by host countries. However, this didn't stop the company from posting record profits. It clocked the largest-ever quarterly profit without one-time gains reported by an US company on the back of spiraling crude prices.
With exploration activities in areas such as Russia, Alaska and South China getting increasingly difficult due to political pressures, access to new reserves is getting increasingly difficult. To add to their woes, oil companies find it difficult to raise production from their rapidly ageing existing fields. In fact, in 2007 Exxon's reserves fell the most in over a decade. Something the company is spending US$ 52 m per day to reverse.
Over the last several years, most global oil companies have had a tough time meeting their production forecasts. It is a similar story with India's premier upstream oil company, ONGC as well. The company produced 6.41 m tonnes (MMT) of crude oil in the first quarter this fiscal, marginally higher than 6.38 MMT produced during the same period last year.Also read- Some breather on the crude prices front?
Inflation still high at 11.98%Also read - Monetary Policy: RBI doesn't give up.
Inflation for the week ended July 19, 2008 was reported at 11.98%, up from 11.89% in the previous week. This is the highest increase since the current wholesale price index series was started in 1995. The increase is attributed to higher prices of food articles and manufactured products. It may be noted that the Reserve Bank of India (RBI) had raised the repo rate and cash reserve ratio to 9% each earlier this week in a bid to anchor inflation.
"Current conditions very tough, but will turn eventually," says Bill Miller
In his recent letter to investors, Bill Miler, the fund manager from Legg Mason famous for outperforming the S&P 500 for 15 consecutive years quotes Warren Buffett from a recent talk. He mentions that as net savers, we should be happy if stock prices declined a lot more, so we could buy even better bargains.
Mr. Miller says that he was of the opinion that the toughest markets he had seen was 1989-90, but now thinks the current period is even tougher. He also mentions that the best time to invest is after the markets have had a dismal performance, and the worst time has always been after a long run of excess returns.
Also read- Our interview with Dr. Marc Faber
More Views on News
Jun 10, 2017
Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.
Aug 19, 2017
Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.
Aug 18, 2017
Buying the index now will hardly help make money in stocks even in ten years.
Aug 18, 2017
Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.
Aug 17, 2017
PersonalFN simplifies the mutual fund account statement for you.
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407