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Raymond James Energy Stat of the Week
by J. Marshall Adkins

Energy Stat: However Scotland Votes, Don't Look for Recovery in North Sea Oil Production
September 15, 2014

This Thursday, Scotland will hold a referendum on the following crucial question: Would it become the first country in history to have an oil economist as head of government? Well, OK, technically the vote is on independence, but if Scotland votes in favor, then First Minister Alex Salmond - former head oil economist at the Royal Bank of Scotland - would presumably get to run the show. After a year of the "no" camp leading, polls have markedly tightened in recent weeks, so it's anyone's guess how the result will turn out. If Scotland decides to remain part of the United Kingdom, it will be a relief for many Scottish businesses, as well as the British pound. When it comes to Salmond's former area of focus, though, it's safe to say that the referendum is not at the top of any oil and gas company's list of concerns. When it comes to U.K. oil production, the political/fiscal backdrop is decidedly unhelpful, but it wouldn't materially change in an independent Scotland. There are, of course, plenty of other reasons why, over the past decade and a half, the U.K. has experienced an oil production meltdown of epic proportions. Next door in Norway, the situation is not as dire, but still rather bleak. While much of our research focuses on growth areas for the global oil market, it's worth taking note of the laggards as well, and with that in mind, today we provide an update on the North Sea's non-stop path downwards.

Please follow the link to the full research document for Mini-Stats as well.

This is a summary of a much more detailed commentary. Please contact your financial advisor for the full report.

There is no assurance any of the trends mentioned will continue in the future. Past performance is not indicative of future results. Investing involves risk and investors may incur a profit or a loss. Specific sector investing can be subject to different and greater risks than more diversified investments. Investing in commodities is generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only form a small part of a diversified portfolio. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising.

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