Usually, a government decision to subsidize clean energy alternatives would be applauded by others.
Not so when the government is Beijing, and Washington politicians halfway around the world are busy looking for votes.
This tiff could be filed away as just another tempest in a teapot... if it were not for the other important projects it could derail along the way. Those projects just happen to have a major impact for American natural gas technology and the companies likely to benefit from its foreign introduction.
If the two countries can get it together, it could mean profitable new opportunities for both.
To find out how the energy sector would benefit from U.S.-China cooperation, read on...
Everything You Need to Know About Tomorrow's OPEC Meeting
Crude dropped for the second straight day yesterday (Tuesday) after Saudi Arabia made it clear that the Organization of the Petroleum Exporting Countries (OPEC) will leave its production targets unchanged at its meeting tomorrow (Thursday). Crude oil for November delivery fell 54 cents a barrel - or 0.7% - to finish at $81.67 a barrel on the New York Mercantile Exchange yesterday. Even with yesterday's decline, oil prices are up 11% over the past 12 months.
Speaking in advance of tomorrow's OPEC meeting in Vienna, Saudi Oil Minister Ali al-Naimi said that prices between $70 and $80 a barrel are "ideal," and noted that the market is "very well-balanced" right now. In a related development, Sanford C. Bernstein & Co. LLC slashed its oil-price forecasts for both next year and 2012, and attributed the new viewpoint to big stockpiles.
But this only provides you with part of the picture. And it'll lead you to the wrong conclusions.
So here's the proverbial "rest of the story" - including everything you need to know about tomorrow's OPEC meeting.
For a better understanding of the workings of the global oil market, please read on...
CNOOC Creates Biggest China-U.S. Oil Deal For Stake in Shale Gas Industry
China's state-owned energy company China National Offshore Oil Corp. (CNOOC) (NYSE ADR: CEO) late Sunday announced it would invest $2.16 billion in U.S.-based Chesapeake Energy Corp. (NYSE:CHK) to increase China's stake in unconventional gas resources like shale gas. It is the largest ever China-U.S. oil and gas deal.
CNOOC initially will pay $1.08 billion for a 33% stake in Chesapeake's Eagle Ford shale acreage in Southern Texas. China's third-largest oil company will invest an additional $1.08 billion by paying 75% of Chesapeake's drilling and completion costs in coming years, allowing Chesapeake to tap hard-to-extract shale gas deposits and boosting its weak balance sheet.
The deal highlights China's need to develop its shale-gas extraction techniques. The country has 26 trillion cubic meters of shale gas reserves that are largely unexplored due to a lack of drilling ability - and Chesapeake is a pioneer in the shale gas industry.
Iraq's Energy Sector Is Moving Forward – With or Without the U.S.
Iraq on Wednesday broke the record - 207 days - for the time between a parliamentary election and the formation of a government. But while Iraq's government is at a standstill, the country's energy sector remains dynamic and U.S. companies can't afford to wait for the political climate to thaw before diving in.
Iraq is slowly retaking the shape of one of the world's most prolific oil producers. Its reserves are actually 25% larger than previously thought.
"Iraq's oil reserves which are extractable are 143.1 billion barrels," Hussein al-Shahristani, Iraq's oil minister, said earlier this week, basing his comments on data provided by Organization of Petroleum Exporting Countries (OPEC).
The Secret Indicator That Points to Much Higher Oil Prices
Crude oil has taken on a life of its own. As I have noted on several occasions, oil is both a commodity in wide demand and a financial asset in its own right.
In the former case, as a commodity, the so-called "wet" barrels (the actual oil) will respond to traditional marketplace pressures - particularly supply and demand.
In the asset role, which involves futures contracts (the "paper" barrels), oil becomes something that can be used as a store of value. As we'll see momentarily, oil's role as a financial asset underpins a crucial new development.
Six catalysts are behind the recent increase in oil prices. Five are well known in the marketplace. But it's the sixth catalyst - not as widely known or understood - that is central to our forecast that oil prices will continue their march.
This sixth catalyst also enabled us to uncover a significant opportunity for you to make a great deal of money.
To find out about those profit plays, please read on...
Record Breaking Contango Suggests Higher Oil Prices for 2011
ConocoPhillips (NYSE: COP) is paying $41,000 a day to keep a storage tanker capable of holding 3 million barrels of oil floating in the Gulf of Mexico, according to international ship- and offshore broking firm RS Platou. And the TI Europe is just one of hundreds of oil tankers sitting idle in waters around the world, as energy companies and investment banks await higher prices for crude.
Oil prices have fallen precipitously since the spring, as optimism about "green shoots" of economic growth gave way to fears of a double-dip recession. Prices have fallen more than 12% to $75.81 a barrel, from a high of $86.54 a barrel in April.
Indeed, with the U.S. economy stuck in the mire, the global outlook for oil demand has diminished - at least in the near-term. Longer-term, however, traders expect prices to surge higher next year as growth solidifies. That's why contracts for crude set to be delivered six months from now are worth more than crude at its current prices - an anomaly known as "contango."
Investing in Canada: The World's Safest Economy
I've said it once, and I'll doubtless say it a few dozen more times before the U.S. economy returns to health: Just because you have to endure recessionary conditions doesn't mean that your money has to.
That's the argument I make when I urge Americans to search for investments outside U.S. borders. Ironically, your money doesn't have to travel all that far: What's arguably the world's "safest economy" is actually located just north of the border.
I'm talking, of course, about investing in Canada.
For the five ways to profit from Canada, please read on...
Petrobras Sets Long-Term Financing Plan by Selling $42.5 Billion of Stock to Government
Petroleo Brasileiro SA (NYSE ADR: PBR), the Brazilian national oil company better known as Petrobras, announced Wednesday that it had agreed to issue $42.5 billion in new stock to the Brazilian government to obtain the rights to five billion barrels of oil in offshore fields.
Petrobras will pay an average of $8.51 a barrel for the oil after almost two weeks of negotiations with the government, according to a regulatory filing. More than half the oil will come from the Franco field in the offshore Santos Basin, the company said.
Even though the company paid what is seen by many analysts as a premium for the rights, the deal is the linchpin for the Latin American oil giant's long-term financing plans.
Is BP Dealing Away Its Future?
In the aftermath of the biggest environmental disaster in U.S. history, the Gulf of Mexico relief-well saga continues to monopolize our attention.
But here's the reality: Money problems - not the relief wells - could prove to be the undoing of BP PLC (NYSE ADR: BP). And that means the company's fate is most closely tied to its ongoing efforts to raise money by selling key assets from around the world.
BP is looking to divest $30 billion in assets during the next 18 months.Selling its assets is one way for the company to raise the money needed to cover its expected liabilities. But here's the problem: Those sales are moving right into the teeth of a new round of mergers-and-acquisitions (M&A) deals that were already taking place in the oil-and-gas sector, due to rising volatility there and the inability of some to withstand the uncertainty.
As a result of all this wheeling and dealing, the big will get bigger - and BP will get smaller. Indeed, the BP that emerges from the mess that it created should be smaller, leaner and smarter. But will that be good enough?
To understand BP's financial strategy, please read on...
Cold-Weather Investing: Coal, Natural-Gas and Heating-Oil Investments Will Pack a Punch in January
The irony about cold-weather investing is that the biggest profits come to those who position their money during the hottest months of the year - even during the record heatwave Americans have been experiencing this year.
In short, now's the time to start thinking about such winter-related topics as heating bills, and such cold-weather investments as natural gas, heating oil and coal.
According to the American Petroleum Institute (API), natural gas provides heat for 55% of homes in the United States, followed by electricity, which warms 39%. Heating oil, propane and coal play only minor direct roles, although coal is used to fire 49% of America's electric generating plants, with another 20% fueled by natural gas.
That means natural gas is the natural choice of investors looking for winter-related profits - although Dr. Kent Moors, editor of Oil & Energy Investor newsletter and a frequent contributor to Money Morning, cautions that factors other than routine home-heating demand play a major role in setting prices.