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.
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...
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.
What Do Oil, Gold and Orange Juice Have in Common? Some Hefty Possible Profits
"So what do you expect from the commodity markets in 2010?"
If I had a dollar for every time I've been asked this question over the past few weeks, I'd be able to buy myself an ounce of gold.
But allow me to tell you the same thing that I've told my friends and colleagues: I'm expecting more of the same. Just because it's a New Year doesn't mean we should expect commodities to behave much differently than they did in 2009.
In my final Investment U column of 2009, I highlighted the crude oil and gold markets as the ones to watch as we headed into 2010.
So far, neither market has been a... Read More...
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.
To see why China is the "new" Saudi Arabia, read on... Read More...
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. Read More...
Cold Snap Lighting a Fire Under Energy Complex and Agri-Commodities
A relentless surge of cold weather is slamming nearly every country in the Northern Hemisphere, disrupting travel, threatening crops and driving energy and commodity prices higher as investors look for ways to cash in.
In the United States, crude oil is trading near a 14-month high. Natural gas and heating oil prices have also surged, as the U.S. shivered under the onslaught of an arctic express that sent temperatures plummeting below zero across two-thirds of the country. Even Florida growers try to protect orange groves from overnight freezing temperatures.
The cold snap is one of the nation's most widespread since January 1985, according to meteorologists at Accuweather.com. While the cold is expected to ease slightly starting Thursday, this winter is on track to be one of the coldest in the past two decades, Ken Reeves, director of forecasting operations at Accuweather told The Wall Street Journal. Read More...
Investment News Briefs
With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Total Forms Joint Venture with Chesapeake; Manufacturing Index Jumps; Cold Snap Drives Oil Higher; Car Sales Surge in December; Kraft Advances Bid for Cadbury; New BofA CEO Optimistic for U.S. This Year, But Krugman Shows Caution; WSJ: Banned Chinese Companies Continued to Do Business With U.S. Firms
- Total SA (NYSE ADR: TOT) will pay up to $2.25 billion for a 25% stake in Chesapeake Energy Corp.'s (NYSE: CHK) assets in the Barnett Shale natural gas field in North Texas, Total said yesterday (Monday). Total will pay $800 million for the stake, and up to $1.45 billion for as long as six years by funding 60% of Chesapeake's costs in the field. The Barnett Shale field is the biggest producer of natural gas in the United States and accounted for 52% of Chesapeake's third-quarter output. Read More...
How to Profit From the Oil-Price Spike of 2010
Oil prices staged a remarkable rally this year on the back of a weak dollar and a nascent economic recovery. In 2010, it's likely that these same factors will combine with an increase in global energy demand to push oil prices back up over $100 a barrel.
With stockpiles still high and energy demand rebounding sluggishly, most forecasts are calling for the "black gold" to edge up into the low-triple-digit price range. That's 40% higher than where oil is trading right now - but is still well below the record high of nearly $150 a barrel that was established in 2008.
Money Morning Chief Investment Strategist Keith Fitz-Gerald is even more bullish. He believes that a price of $100 a barrel is "easily attainable" and says that some sort of unforeseen market shock could cause crude oil to spike as high as $150 barrel by the end of 2010.Read More...
If U.S. Oil Companies Aren't Winning Bids in Iraq, Who Is?
Iraq has auctioned off more proven oil reserves in the past six months than are collectively held by the United States, Mexico, and the United Kingdom.
But U.S. oil companies have signed surprisingly few development contracts – and foreign rivals have swooped in to scoop up major deals.
Take last weekend, when Iraq wrapped up the biggest oil-field auction in history. Major new deals were announced by Europe's Royal Dutch Shell PLC (NYSE: RDS.A , RDS.B), OAO Gazprom (OTC ADR: OGZPY), Lukoil (OTC ADR: LUKOY), China's China National Petroleum Corp. (CNPC), and Malaysia's Petroliam Nasional Berhad (Petronas).
The U.S. oil majors – ExxonMobil Corp. (NYSE: XOM), ConocoPhillips (NYSE: COP) and Chevron Corp. (NYSE: CVX) – were nowhere to be seen. Read More...
Why Russia's Oil Fields Will Soon Be Crawling with Westerners
Western oil majors are about to help Moscow solve its energy problem. And that could be a boon for investors.
The traditional Russian oil fields in Western Siberia are well past peak production. Some satellite fields in the region remain, but the extraction gains will be marginal.
My sources in Russia's Ministry of Natural Resources and Ecology (MNRE), the government entity responsible for distribution and oversight of development leases, now acknowledge that the country's overall crude oil production could decline by more than 7% over the next several years. Read More...
- Three Ways to Profit From Rising Oil Prices An explosion in the world money supply and the rapidly growing auto markets of China and India have fueled an incredible bull run in oil prices. And, it looks like oil still has a long climb ahead. This report will show you three ways to profit from the bull in oil prices. Read More...
- A Money Morning Interview: The Future of Energy Renowned Oil Expert Dr. Kent Moors Details Shortages of Oil, the Impact of Higher Prices, the Promise of New Technologies and the Opportunities For Investors Dr. Kent Moors is one of the world's foremost experts on oil, energy policy, finance, risk management and new technologies. Moors advises the leaders of six oil-producing countries, including the […] Read More...
- Investment News Briefs With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world. More Insider Trading Arrests Coming; Icahn Offers CIT Bailout; Oil Pushes $80; Treasury Steps In To Support HFAs; N.Y. Times to Cut 100 Newsroom Jobs; Hasbro Shares Fall Amid Soft […] Read More...