Is Noble Corp (NYSE:NE) a Buy?

An interesting story is emerging with oil services companies, and it's not Transocean (NYSE:RIG), which while down in price and P/E, are still exposed to the Gulf oil spill, and depending on what is found out as to the cause of the explosion and resultant leak, won't be cleared of the cloud overhanging them.

One of their major competitors, Noble Corp (NYSE:NE), has evidently been lumped together with the oil industry exposed to the Gulf, although there is no connection or exposure they have to it situation.

But incredibly their P/E is lower than Transocean's, standing at 5.07 as I write. Transocean's P/E is at 5.28.

To me the entire question is what is the rest of the summer going to be like as far as travel goes, as gas prices are already dropping after the Fourth of July weekend.

Many think this is going to be a slow summer for travel, based on the poor economic conditions in the U.S. and other parts of the world, which will keep people from spending in a big way.

So depending on whether or not you think gas and oil prices are going to rise, will determine if Noble is a buy to you.

I think it is a stock that must be watched though, and it has no reason to be where it's at, and has a lot of upside potential.

Gas Prices Drop as Fourth of July Weekend Arrives

With the economy in the U.S. extremely weak, and economic data continually bringing bad news, Americans continue to tighten up their spending habits and as a result demand for gasoline has fallen, along with the prices.

Travelers over the Fourth of July weekend should be happy, as prices dropped slightly from last week, at a time when demand usually pushes prices up in a big way.

Gas prices on a national average dropped 0.4 cent on Friday to $2.75 a gallon. Although that's higher than last year at this time, it's far below projections of $3 a gallon analysts had been calling for in the spring months.

The lowest gas prices are expected to be in the Gulf Coast states, Texas, and the Midwest.

Since last week, gas prices have fallen on average by one-half a cent.

J.P. Morgan (NYSE:JPM): Refining Margins Shrinking

Refining Margins Shrinking

J.P. Morgan (NYSE:JPM) analysts said refining margins across the globe are probably going to shrink starting in April and May, citing the large amount of maintenance needed starting in March.

Maintenance isn't usually done this early in the year, and it caused some to search out the causes of inventories having a higher amount of product taken from it than usual.

The result has been backwardation, which means short-term gas and other related refining products are higher price than the future contracts.

“Refiners are already buying the crude for this rebound, hence the tightening crude spreads,” JPMorgan said. “Tighter crude, weaker products and demand for fuel oil are a recipe for a collapse in refining margins.”

Refining Margins Shrinking

ExxonMobil (NYSE:XOM) Shale Gas Deposits in Europe

ExxonMobil Shale Gas in Europe

After largely missing out on the huge amount of shale gas available in the U.S., large energy companies like ExxonMobil (NYSE:XOM) are now looking to the European continent as the place they can access large shale gas deposits.

If the amound of shale gas in the U.S. is any indicator, there could be an extraordinary amount in Europe as well, as the technology is now available to tap into it.

For ExxonMobil, their huge move into the shale gas sector was via its acquisition of XTO, which specializes in the field.

Even with the drop in the price of gas, over the long term the shale gas play should result in solid revenue and profits for those willing to invest with a long term horizon in mind.

The major challenge for those looking to Europe for shale gas is the industry infrastructure will need to be build up in order to process the gas, as there are only about 50 onshore gas-drilling rigs in Europe in contrast to the approximate 2,000 operating in the U.S.

ExxonMobil Shale Gas in Europe

BP (NYSE:BP) Out-produces ExxonMobil (NYSE:XOM)

BP Versus ExxonMobil

BP (NYSE:BP) has made a big deal about it producing more oil and gas for the first time in history over its giant competitor ExxonMobil (NYSE:XOM).

The problem is the profits of BP plunged by 45 percent in 2009, while ExxonMobil had earnings of over $4 billion more than BP, making the boast somewhat empty.

While blaming the decrease in profits on oil prices falling, you have to consider ExxonMobil experienced the same conditions, and were able to thrive in them, revealing evidently a BP company that doesn't have its costs reined in as they should have.

BP Versus ExxonMobil

Commodities Rise on Falling Dollar

Commodity Prices Rising

The falling dollar gave commodities a boost today, as many raw materials rose as a result of the dollar-denominated factor.

Gold, silver, copper, platinum and palladium all enjoyed price increases with little resistance in a relatively light day of trading.

Another commodity sector rising was energy, where oil, natural gas and gasoline all spiked.

Also joining the other commodity sectors in rising in price were the grains, where corn, soybeans and wheat all moved upwards.

What this shows me is how important the U.S. dollar is to the inflationary pressure we continue to face. While that's nothing new, it does show how just a little weakness in the dollar can drive commodity prices upwards.

It also shows me how vulnerable we are to inflation, and how quickly things can change in relationship to that.

Commodity Prices Rising

Financial Advisor

Commodities: Oil Prices Drop on Warmer Weather

Warmer Weather Drives Oil Prices Down

Cold weather has been driving the price of oil, and that seems to have come to an end for now, at least until another possible cold trend comes through in February.

If you can trust those forecasting the weather, the next month should be a much warmer one, and that should have a major impact on the price of oil during that time, as it should drop after running up for some time as the cold weather continued to linger.

With China's central bank increasing its reserve ratios, it's hard to tell if that's a statement that they're going to cut back on commodity imports at this time, as in 2009 they grew by about 56 percent for the year.

With that combination, we again, would see significant downward pressure on light sweet crude over the next month. Other energy sectors and gas should also have a similar price movement.

Warmer Weather Drives Oil Prices Down

Crude Oil Prices Fall as Demand Slows

For the ninth straight day crude oil prices fell, the longest period of decline since July 2001. Much of that is attributed to a real recovery not really happening at this time, as the areas where it count - fuel and energy, haven't increased in demand as consumers continue to hold on to their capital.

Most of crude oil demand has failed to materialize in developed markets, the key reason crude oil prices continue to fall. Over the last couple of months crude oil prices have plunged 15 percent.

After breaking down through the $70 a barrel barrier, the next level expected to be broken is $65. Analysts say if oil were in reality trading based on its fundamentals, crude oil would be priced below $60 a barrel.

Because of the low oil demand, stockpiles in the U.S. have also increased, putting more downward pressure on the price of oil futures.

In the U.S., which is the largest consumer of oil, usage has been down to 18.5 million barrels a day, a three percent drop from the same period last year.

Confirming people have cut back on energy use to conserve dollars, stockpiles of gasoline have risen for the third week in a row, reaching 216.3 million barrels. That is obviously from people cutting back on travel.

Also climbing extremely high are diesel and heating oil inventories, climbing an extraordinary 25 percent over the five-year average.

Weakening Economy Continues to Drive Down Oil, Gas Prices

Weakening economic conditions continue to put downward pressure on oil prices, which in turn is also driving down the price of gasoline as consumers continue to tighten their wallets and spend only on necessities.

Oil for December delivery fell as low as $60.16 today, and ended up settling at $60.77 on the New York Mercantile Exchange. Brent Crude in London moved in step, falling by $4.44 to settle at $57.43 for December delivery.

Gasoline prices in the U.S. have continued to fall as well, with overnight averages coming in at $2.34 a gallon according to the AAA, and could fall to $2.00 a gallon by the end of 2008.

Commodity News Around the Network

Arian Silver's Exploration Update-San Jose: Phase-1 Drill Results Summary; Phase-2 Drilling Progresses

High Desert Gold Plans to Drill the Bluebird Copper-Silver Property

Happy Corn Subsidy Pacific Ethanol: Company Gets Clobbered with High Corn Prices

Oil Drops Below $115 a Barrel

More Reasons to Drop the Ethanol Nonsense

Gold Plunges Below $820 an Ounce

ECB Launching U.S. dollar Liquidity-providing Operation

Wheat Growers Facing Tough Cost-Control Challenges in 2009

Commodities in Longest Consecutive Drop Since November

With some commodites falling as much as 10 percent, the 5-day slide continues, as the slowing world economy could cut back the demand for a variety of commodities.

Leading the drop in price has been corn, sugar and crude oil. The Reuters-Jefferies CRB Commodity Index plunged by 7.4 percent over the week, ending the longest consecutive decline since the week ending November 30, 2007.

This had to come as the first hald of 2008, commodities rose at the CRB index rose by 29 percent. That's sure to end up lowering demand an numerous commodites like mentioned above, as well as gold, platinum, wheat, rice, gasoline and copper are straining to reach higher.

Demand for gasoline has already started falling some as people stay closer to home in the U.S.

Assuming commodities overall rise more, we're sure to see demand slow down, as consumers and businesses hold back on purchases and acquiring some of them.

``All of these commodities are starting to show signs that the big bull market is over, and the things that people have really made the most money with in the past seven years will start to substantially drop,'' said Michael Aronstein, president of Marketfield Asset Management in New York.
As a result of all this, a number of investors are rearraning their porfolios to reflect the changing realities. A lot of money has left gold and commodites and has been reinvested in equities over the last week.