SOURCE: The Bedford Report

The Bedford Report

November 30, 2010 08:46 ET

Will the Euro Zone Debt Crisis Be a Damaging Blow to Oil & Gas Companies?

The Bedford Report Provides Analyst Research on BP & ConocoPhillips

NEW YORK, NY--(Marketwire - November 30, 2010) -  To kick off the week oil prices continued their positive momentum despite the recent rise in the dollar. It is well noted that oil prices and the dollar have an inverse relationship because the rising dollar makes oil more expensive to holders of other currencies. With the eurozone debt crisis still garnering significant headlines, analysts have warned that the dollar's strength against the euro may eventually send crude oil prices down. The Bedford Report examines the outlook for companies in the Major Integrated Oil & Gas Industry and provides research reports on BP PLC (NYSE: BP) and ConocoPhillips (NYSE: COP). Access to the full company reports can be found at:

Integrated Oil & Gas companies posted respectable earnings in the most recent quarter. The higher crude prices helped offset lower natural gas prices that have resulted from high levels of production coming from shale operations. The markets have not been kind to natural gas, but data would seem to indicate the underperformance is more related to supply side issues in the natural gas market. Demand for natural gas has increased, but these increases have not been able to keep pace with supply. The supply glut is primarily driven by a rapid rise in drilling rig utilization, as well as technological improvements in horizontal drilling & hydraulic fracturing techniques.

ConocoPhillips recently scaled back North America natural gas production because of low natural gas prices. 

The Bedford Report releases regular market updates on the Major Integrated Oil & Gas Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous analyst reports and industry newsletters.

Longer term, there is slightly more optimism surrounding natural gas. Analysts argue that the natural gas oversupply in the United States could make the nation a major natural gas exporter in the coming years. Demand for gas is soaring in Asia and other emerging markets as their economies expand.

BP has taken significant steps to gain recognition not only as a major oil producer, but also as a natural gas producer. Last week the company's Russian joint venture TNK-BP plans to double natural-gas production over the next decade. TNK-BP says it expects natural gas to account for 20% of the company's earnings before interest, taxes, depreciation and amortization by that time.

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