British banker and politician Nathan Rothschild once said: “Buy when there’s blood running in the streets.” And blood is certainly spilling in the streets of the oil and gas industry. The North Sea benchmark, Brent crude, closed at $70 a barrel on Friday, declining by 40% since June. Today it’s trading at around $71. Energy stocks around the world lost $500 billion of market value in the past week, while many oil-exporting countries will face budget crunches in 2015. Saudi Arabia needs Brent at $93 a barrel to balance its budget; for Russia, as high as $120 a barrel. We have argued for lower oil prices since last year, due to these three factors: 1. The unprecedented increase in U.S. oil production due to more efficient horizontal drilling and hydraulic fracturing technologies; 2. Weak demand growth in developed countries; 3. The imminent slowdown of the Chinese economy, which has […]