Energy News and Trader Impact
Energy policies and announcements are continuously changing, but this week has certainly seen its fair share of developments. Events impact US corporations and also have global reach.
The New York attorney general’s office is investigating Exxon Mobile’s company records on climate change policies that may open additional inquiries into additional oil companies. Many oil companies including BP, Shell, and Chevron participated in a coalition to question climate change science through such organizations as the Global Climate Coalition. Such investigations can cost oil companies significant legal expenses and potentially fines if they are found guilty of wrong-doing. Loss of consumer confidence in corporations’ images can also translate to declining share values.
In other new US President Barack Obama put the final nail in the coffin for the proposed Keystone XL pipeline project, citing his concerns for environmental impact. This pipeline would have carried carbon-heavy petroleum from Canada to the US gulf coast crossing a span of nearly 1,200 miles. Environmentalists have fought construction of the pipeline for several years while industry officials have spoken for the jobs and economic growth to be created by such an effort and improved safety over alternative methods of transportation (rail or truck). Timing of this announcement is seen to coincide with the President’s involvement with a United Nations summit meeting on climate change in Paris this December. Mr. Obama is expected to encourage other nations to formulate joint policies on climate change.
Global energy prices remain low due to reduced demand and increased supplies. This naturally results in lower profits and impacts share prices as well. US markets also experienced a drop in oil prices this week in part due to reduced unemployment ranks that strengthened the dollar.
Positive Energy News
On the plus side lower oil prices equate to lower gasoline prices globally that provide more expendable income for consumers. While oil-producing countries can experience sluggish economies from such circumstances other nations reap the benefits of low energy prices.
Consumer products such as electronics, home goods, and automobiles see increased sales when energy prices are low. Investors can take advantage of such scenarios by participating in those market segments while they’re “hot”.
Impact for Traders from Energy News
With the holiday season upon us expendable income will be a welcome gift for consumers. Energy availability and affordability may be an impetus for traders to participate in markets that benefit from low oil prices like dining out, entertainment, and travel. These are market segments traders will want to monitor for trends that indicate opportunity for gains.
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