Commodities markets are heavily interdependent in general, but particularly so in the energy sector. Yet industry analysts far too often function in commodity silos, cut off from the contextual intelligence necessary to develop a thorough and sophisticated understanding of how these markets function. Driven by these observations, ECRG offers a range of products focusing on different aspects of the energy production life cycle, with an emphasis on the interconnectedness of energy commodities and fiscal and capital dynamics. Oil and gas prices are inextricably linked by virtue of overlapping source rock and operators; gas and coal compete heavily for power market share; and oil and coal are both critical feedstock components for production of each other, via their downstream products – diesel and OCTG.
Similarly, to the same degree commodity prices impact production, producer balance sheet management not only plays into the producer’s ability to thrive at the micro level, but also influences the health of the overall macro production landscape. Capital flows add yet more complexity, as producers address increasingly volatile commodity prices—influenced by the financial services industry and a growing derivatives market, and thus technical as well as fundamental factors. As such, an understanding of all of these moving pieces is critical for a complete understanding of one’s particular area of focus, and ECRG’s product suite is intended to help clients achieve that end.