---
title: "Weak Oil"
url: https://independentstockanalysis.com/weak-oil/
description: "Crude Futures Drop on Greek Austerity Vote, Rising U.S. Supply at Bloomberg . Energy chart of the day: US oil output during last week of October was…"
published: 2012-11-07
updated: 2012-11-07
---

# Weak Oil

Published 2012-11-07

Posted on

by

J.J. Butler

Crude Futures Drop on Greek Austerity Vote, Rising U.S. Supply at [Bloomberg](http://www.bloomberg.com/news/2012-11-07/crude-futures-drop-on-greek-austerity-vote-rising-u-s-supply.html).

Energy chart of the day: US oil output during last week of October was highest weekly production since January 1995 from [Mark Perry](http://www.aei-ideas.org/2012/11/energy-chart-of-the-day-us-oil-output-during-last-week-of-october-was-highest-weekly-production-since-january-1995/).

U.S. net petroleum imports were lower by 12% in 2012 through August from 2011: [EIA](http://www.eia.gov/dnav/pet/pet_move_neti_a_EP00_IMN_mbblpd_m.htm).

Meanwhile, world demand is weak: “The Organization of the Petroleum Exporting Countries (OPEC) is putting forth bearish signals on the world’s economy. The 12-member organization lowered its forecast for growth in global oil demand this year and warned of a continued slowdown in 2013.” [Oil and Gas 360](http://oilandgas360.com/important-data-points-from-opecs-october-monthly-oil-market-report/)

Re-post: Gold over oil on the charts by [Greg Harmon](http://dragonflycap.com/2012/11/06/the-gold-to-crude-oil-ratio-is-getting-jiggy/).

Penn West (PWE) is the largest Canadian O&G income play. Continued lackluster [results](http://finance.yahoo.com/news/penn-west-exploration-announces-financial-103500806.html)pushed the stock to new lows, and then yesterday four senior executives were [pushed](http://finance.yahoo.com/news/penn-west-announces-changes-senior-120000337.html) out the door. PWE has long offered promise with a ginormous asset base, yet the company seems be eating itself to death by continually selling assets to fund the big dividend.

This morning we see long time *ISA* favorite royalty company Franco-Nevada (FNV) [purchasing](http://finance.yahoo.com/news/franco-nevada-agrees-acquire-weyburn-222500396.html) an oil royalty from PWE. FNV will discuss the purchase in conjunction with its third quarter [earnings](http://finance.yahoo.com/news/franco-nevada-announces-third-quarter-223900550.html) conference call this morning. Seems to me FNV is getting the better end of the deal.

Natural gas a transportation fuel is suboptimal. Yet it is still a wonderful fuel: [NY Times](http://dotearth.blogs.nytimes.com/2012/11/05/how-natural-gas-kept-some-spots-bright-and-warm-as-sandy-blasted-new-york/?smid=tw-share).

*ISA* maintains North American NG exports will crash the international LNG price. “Asian consumers — the world’s top LNG users — are growing tired of paying huge premiums for liquefied natural gas based on a historic link with oil prices and demanding a link to cheaper North American prices instead…” [Financial Post](http://business.financialpost.com/2012/11/06/tables-turn-on-b-c-s-natural-gas-plans-as-energy-hungry-asia-seeks-cheaper-prices/)