Oil Prices on the Rise as OPEC Holds Production Steady
Oil prices yesterday (Wednesday) rose $1.23, or 1.5%, to close at a two-month high of $82.93 on the New York Mercantile Exchange (NYMEX) a fter the Organization of Petroleum Exporting Countries opted to keep its production quotas in place.
However, it may not be much longer before prices take off again, possibly hitting $100 a barrel by the end of the year.
Current prices are "beautiful," Saudi Arabian Oil Minister Ali al-Naimi told reporters before OPEC's meeting.
"The producer is looking at this price, the consumer is looking at the price, the investor is looking at the price, and everybody is saying this is great," he said.
OPEC, which supplies about 40% of the world's oil, set its official cap at 24.845 million barrels per day (bpd) in December 2008 and has kept it there for five straight meetings. In that time oil prices have more than doubled.
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How to Profit from the Next Spike in Oil Prices
Earlier this week, British company Desire PLC (Pink Sheets: DSPMF) began drilling in an offshore block of the Falkland Islands. Immediately, Argentina President Cristina Fernandez de Kirchner let loose with a howl of rage, and the Summit of Latin American and Caribbean Unity issued a protest against the British company's drilling operations.
Argentina's claim to the Falklands had remained dormant since the war 28 years ago, yet the moment the drill bit touched seabed the years rolled away. This showed yet again that oil remains salient to international politics and the world economy in a way shared by no other commodity. So how should investors play it?
For the best ways to profit from rising oil prices, read on…
Saudi Arabia Shifts its Focus to China as the United States Falls Out of Favor
Saudi Arabia, the world's largest oil producer, last year shipped more oil to China than it did the United States for the first time ever – a shift that highlights China's ascension to the ranks of the world's economic elite, as well as its position as the new focal point for the world's energy producers.
The flow of oil from Saudi Arabia to China rose to more than 1 million barrels per day (bpd) last year, just as demand in the United States fell below that level for the first time in more than two decades.
China in December alone imported a record-high 1.2 million bpd of Saudi oil, as its economy rode the momentum of Beijing's $585 billion (2 trillion yuan) stimulus package. U.S. imports of Saudi oil, on the other hand, fell to a 22-year low of 998,000 bpd in the first 11 months of 2009, as the world's largest oil consumer clawed its way back from its worst recession in 70 years.
How to Profit as Wall Street Insiders Push Oil Prices Skyward
Most forecasts are calling for oil to edge up slowly over the next year. Or, that's what Wall Street wants you to believe anyway.The big Wall Street firms control millions of barrels of oil and can direct their clients' money into oil. Which way do you think they want oil to go? Find out how Wall Street can manipulate oil prices… and the one move to make now to profit right alongside the "big boys."
Ghana May Kill Exxon's $4 Billion Oil Deal
The government of Ghana may kill Exxon Mobile Corp.'s (NYSE: XOM) plans to buy a $4 billion stake in a giant offshore oil discovery from Kosmos Energy LLC. The move could help China expand its growing presence in the region through its state-owned oil company China National Offshore Oil Corp. (NYSE ADR: CEO).
Ghanaian Energy Minister Joe Oteng-Adjei sent a letter to Exxon last week informing the company that the government wouldn't approve the deal with Kosmos. The letter said the government is "unable to support an Exxon Mobil acquisition of Kosmos's Ghana assets," according to a copy reviewed by The Wall Street Journal.
The government said Dallas-based Kosmos had shared critical information about the field with potential buyers without its permission. Ghana also said Kosmos had left Ghana's state-run oil company, Ghana National Petroleum Corp. (GNPC) out of discussions held to determine how the field should be developed.
Oil Prices Set to Surge to $90 a Barrel by Midyear, Retest Record High in 2011
In its 2010 forecast series, Money Morning predicted the price of oil would reach $100 a barrel by the end of the year. And while crude prices stalled in January, a growing body of evidence suggests that call may not be far off.
Oil prices rose above $80 a barrel for the first time ever on Sept. 13, 2007. From there they jumped 84% to $147 a barrel in July 2008. Then, in 2009, they surged more than 133% from a low of $34.03 a barrel in February to $79.39 a barrel at the end of December.
The price of crude again topped out above the $80 a barrel mark in early January, but has since slid back down to about $75 a barrel. However, some analysts believe that this is just period of temporary cooling before prices reignite and soar to $90 by midyear, and as high as $200 a barrel by 2012.
Will China Supersede Saudi Arabia as the Key to U.S. Oil Prices?
I bought a Toyota Prius last Saturday.
The signs are everywhere that oil is headed for stratospheric highs – $200, $250 or even $300 a barrel. Some of these signs are just plain obvious. But even the subtle indicators are telling us that some very expensive energy costs headed our way.
Let me tell you about one such indicator that I came across over the New Year holiday. A tiny news item said that Saudi Arabian oil concern Aramco is abandoning a lease on Caribbean oil storage, and further reported that PetroChina Co. Ltd. (NYSE ADR: PTR) is moving in to take Aramco's place.
Most investors here in the West – if they even read the item – would've dismissed it as just another minor business transaction, one among the thousands that take place each day. But this particular deal was much more than that. It's another indication of China's continued global emergence. And it also underscores this country's relegation to the growing legion of "former" world powers that have been eviscerated by the financial crisis that they created.
In case you missed the story, let me share the details, and then explain what I believe those details actually mean.
Wall Street Scrambles its "Contango Convoy" to Capitalize on Higher Oil Demand
A 26-mile-long line of idled oil tankers, enough to blockade the English Channel, are firing up their engines and jockeying for position in a race to cash in on the bone-chilling deep-freeze plaguing the North America, Europe, and Asia.
The supertankers, each of which can hold over 2 million barrels of oil, are steaming "all ahead full" to deliver their stores of crude, heating oil and other distillates to the United States.
Their clients – which include several huge Wall Street investment firms – are eager to unwind what's become known as the oil storage trade.
The New Oil Index is About to Create Even More Opportunity for Investors
Speculators in New York won't be calling the shots anymore. Not in oil, anyway.
The way we price it. The places we trade it. The companies that stand to profit most.
It's all about to change.
This was confirmed at a meeting I just attended in The City, London's financial district. I arrived from Moscow's Domodedovo Airport for an unusual Saturday morning gathering of bankers, traders and analysts called only days before.
The subject? A new oil-pricing index.
This is huge.
More oil-project funding is raised within a three-mile radius of The City's Liverpool Street train station than anywhere else on Earth. And now they're preparing to control the oil trade, as well.
This will create all kinds of new ways to make money in oil. Not just with fancy financial instruments designed for the "big boys," but with retail investments, too. So there's money in this for you.