Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18
US Stocks Set For Further Advances As Q2 Earnings Start - 15th Jul 18
Stock Market vs. Gold, Long-term Treasury Yields, 10yr-2yr Yield Curve 3 Amigo's Update - 15th Jul 18
China vs the US - The Road to War - 14th Jul 18
Uncle Sam’s Debt-Money System Is Immoral, Tantamount to Theft - 14th Jul 18
Staying in a Caravan - UK Summer Holidays 2018 - Cayton Bay Hoseasons Holiday Park - 14th Jul 18
Gold Stocks Summer Lows - 14th Jul 18
Trump US Trade War With China, Europe Consequences, Implications and Forecasts - 13th Jul 18
Gold Standard Requirements & Currency Crisis - 13th Jul 18
Focus on the Greenback, Will USD Fall Below Euro 1.6? - 13th Jul 18
Stock Market Outlook 2018 - Bullish or Bearish - 13th Jul 18
Rising Inflation is Not Bearish for Stocks - 13th Jul 18
Bitcoin Picture Less Than Pretty - 13th Jul 18
How International Observers Undervalue the Chinese Bond Market - 13th Jul 18
Stocks Trying to Break Higher Again, Will They? - 12th Jul 18
The Rise and Fall of Global Trade – Redux - 12th Jul 18
Corporate Earnings Q2 2018 Will Probably be Strong. What This Means for Stocks - 12th Jul 18
Is the Relative Strength in Gold Miners to Gold Price Significant? - 12th Jul 18
Live Cattle Commodity Trading Analysis - 12th Jul 18
Gold’s & Silver’s Reversals’ Reversal - 12th Jul 18
The Value of Bitcoin - 11th Jul 18
America a Nation Built on Lies - 11th Jul 18
China, Asia and Emerging Markets Could Result In Chaos - 11th Jul 18
Bullish Gold Markets in the Big Picture? - 11th Jul 18
A Public Bank for Los Angeles? City Council Puts It to the Voters - 11th Jul 18
Yield Curve Inversion a Remarkably Accurate Warning Indicator For Economic & Market Peril - 11th Jul 18
Argentina Should Scrap the Peso and Dollarize - 11th Jul 18
Can the Stock Market Close Higher For a Record 10th Year in a Row? - 11th Jul 18
Why Life Insurance Is A Must In Financial Planning - 9th Jul 18
Crude Oil Possibly Setting Up For A Big Downside Move - 9th Jul 18
BREAKING: New Tech Just Unlocked A Trillion Barrels Of Oil - 9th Jul 18
How Trade Wars Penalize Asian Currencies - 9th Jul 18
Another Stock Market Drop Next Week? - 9th Jul 18
Are the Stock Market Bulls Starting to Run? - 9th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

Crude Oil Shock Dead Ahead … Take Action NOW

Commodities / Crude Oil Jan 21, 2011 - 08:12 AM GMT

By: Sean_Brodrick

Commodities

Best Financial Markets Analysis ArticleWe are on a collision course with the next oil shock. Most people won’t know it until it hits them right between the eyes with all the force of a ball-peen hammer. By then it will be too late.

Here is some of the latest news I’m watching …


Increased Demand, but No Increase in Supply

The Organization of Petroleum Exporting Countries (OPEC) raised its global oil demand forecast to a growth of 1.23 million barrels per day (bpd) in 2011, for a total expected demand of 87.3 million bpd in 2011. That’s 50,000 barrels higher than it expected last month.

Meanwhile, the International Energy Agency (IEA) is expecting even higher demand. The IEA says it expects oil demand this year will rise to 89.1 million barrels a day — up from 87.7 million barrels a day in 2010. That new estimate is 400,000 barrels a day more than it expected last month.

Soaring sales keep India's car factories humming.

We already know that oil stockpiles in the U.S. are falling fast. What would stabilize prices is more supply. But OPEC says it views the world’s oil market as well supplied and inventories should build in the first half of the year, so it’s not going to pump any more.

Iran’s oil minister, Masoud Mir-Kazemi, told reporters:

“The increase toward $100 is not worrisome … none of the OPEC members considers this figure as being unreasonable.”

Translation: “Nyah! Nyah! Pay up, thank you!”

China Expected to Be Biggest Oil Consumer by 2030  

In a report released on Wednesday, oil giant BP says that China will be the largest source of oil consumption growth over the next 20 years. China’s thirst for oil is expected to rise to 17.5 million bpd. This means China would overtake the U.S. as the world’s biggest oil consumer.

This comes on the heels of the bombshell news China dropped on the global oil market recently …

According to that country’s just-released customs data, oil imports rose 18% in 2010, to 4.9 million bpd. That’s much, much higher than the 8.8% increase predicted by the U.S. Energy Information Administration.

What’s more, China’s oil imports are accelerating — hitting 4.9 million bpd in December. Driving that gain is the fact that China, a nation where everyone commuted by bicycle not too long ago, now has 60 MILLION cars on the road, with 12 to 18 million more new cars expected to be added this year.

And it’s not just China …

India Shifts into Higher Gear

Soaring sales keep India's car factories humming.
Soaring sales keep India’s car factories humming.

India consumed nearly 3 million barrels of oil per day in 2009, and is buying so many cars — with sales jumping 21% in November — that it is expected to be the fourth largest car market in the next three years.

Heck, India’s Prime Minister Manmohan Singh, recently admitted that his country’s oil demand should jump 40% in the next decade!

These are staggering numbers. And one thing’s for sure — the rip-roaring car buying and oil demand growth in Asia is going to directly impact you!

There ARE New Oil Discoveries, But

The oil bears are pinning some of their hopes on new, big discoveries in oil fields off the coast of Brazil. Those fields may hold 123 billion barrels of oil, twice what was previously estimated.

Still, it takes a LONG time to bring those new oil finds to market.

Tapping some of those deepwater fields requires technology that hasn’t even been perfected yet. And the sad fact is that the Brazilian finds, as well as new discoveries in China and Angola, and the potential for increased production in Iraq, just aren’t enough to make up for the rapid depletion of existing oil fields.

For example …

  • Kuwait has been in decline since 1970.
  • The U.S. has been in decline since 1971.
  • Iran’s oil production has been in decline since 2008 (it produces more natural gas than oil). Meanwhile, its demand is soaring.

Soaring sales keep India's car factories humming.

  • Indonesia has been in a free fall since 1991, and this former OPEC exporter is now an importer.
  • The UK North Sea has been declining since 1999, and its decline has gotten a lot worse recently. What’s more, the United Kingdom, once an oil exporter, is now seriously talking about oil rationing.
  • Norway’s oil production has been in decline since 2001.
  • Mexican production has been dropping since 2005.

There are plenty more examples, but you get the picture. Either BP is counting on some major new discoveries no one else knows about, or there is going to be a serious tug-of-war in the global oil supply/demand picture, one that will probably be resolved by much higher prices.

And just because oil prices skyrocket here in the U.S. doesn’t mean everyone feels the same pain. Many governments, including the Chinese, artificially subsidize gasoline prices to keep restless citizens happy.

Also numerous experts think China’s currency will head higher against the U.S. dollar. If that happens, Chinese consumers will be cushioned from the blow even more since oil is priced in dollars.

Take Action NOW to Protect Yourself and Potentially Profit

There is nothing you or I can do to stop the rise of oil prices. You CAN hope for another global recession. That would bring oil prices down, but you wouldn’t like what else comes with it.

However, the one thing you can do is make some smart investments in select energy stocks and funds that should rise with the price of oil. The profits from those trades would give you a nice cushion when you get pinched at the gas pump.

You can do your own research. Or you can hop on the profit train with MY best picks in a new energy report, Burning Oil: 7 Winners in the Next Energy Boom.

This proprietary research report is packed with analysis, insight, and my best oil picks to power up your portfolio. What’s more, I’m including three follow-ups with your subscription.

If you haven’t signed up yet, there is still time. You can get my Burning Oil report right now — just point your web browser here. And whatever you do, I don’t recommend you ignore the coming energy shock. It’s best to prepare your portfolio and your life for the higher prices ahead.

Yours for trading profits,

Sean

P.S. My report is packed with analysis and red-hot recommendations in the best energy stocks and funds, plus a “secret” weapon you might want to add to your arsenal of profit potential — 8 picks in all. Act now while Wall Street snoozes — the next oil shock is coming whether you like it or not. Get onboard today!

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules