Michael UguliniGold, Oil, OPEC, China
February 3rd 2009 16:52
When markets are in upheaval, investors often look to safer-havens to invest in. With the current economic, financial, and even social turmoil in the world, you may see gold prices continue to climb. It's not a sure-fire guarantee, but precious metals are one of those "safer" havens that sometimes receive extra attention.
Economic news of the not very inspiring sort tends to favor gold. When the labor market groans and orders for durable goods wane, investors adjust their strategies for themselves and their clients. Many look to these precious metal assets (hard assets) and forsake stocks that are more volatile.
What's up with oil as well?
- According to a report in the New York Times (January 25), Petrobas, the state-controlled oil company of Brazil, plans to spend over $174 billion over the next five years. A significant amount of this will be for deep-water oil and gas exploration.
- Royal Dutch Shell is the second-largest (non-government controlled) oil company based on market capitalization.
- Chevron announced a $22.8 billion capital and exploratory spending program for 2009. Of this spending, seventy-five percent will be for upstream oil and gas exploration and production.
- Canada accounts for approximately twenty percent of the United States' imports of crude oil and oil products.
In times of volatility on the world oil markets OPEC and other oil producing nations sometimes seek to prop up falling oil prices. They do this by curtailing output to one degree or another. They manipulate the supply part of the supply and demand equation. Sometimes they react in time, sometimes, when demand drops rather quickly they see their prices fall fast.
While there will be peaks and valleys in demand, OPEC sees demand for oil in China doubling by the year 2030. If their forecasts hold true they foresee 91 million cars in China by then. That's a lot of gas. However, will alternative fuel sources have a bigger role on stage by that time, or is twenty years or so away still to soon for alternative energies to make an impact?
Watch a discussion on the GOLD STANDARD
Economic news of the not very inspiring sort tends to favor gold. When the labor market groans and orders for durable goods wane, investors adjust their strategies for themselves and their clients. Many look to these precious metal assets (hard assets) and forsake stocks that are more volatile.
What's up with oil as well?
- According to a report in the New York Times (January 25), Petrobas, the state-controlled oil company of Brazil, plans to spend over $174 billion over the next five years. A significant amount of this will be for deep-water oil and gas exploration.
- Royal Dutch Shell is the second-largest (non-government controlled) oil company based on market capitalization.
- Chevron announced a $22.8 billion capital and exploratory spending program for 2009. Of this spending, seventy-five percent will be for upstream oil and gas exploration and production.
- Canada accounts for approximately twenty percent of the United States' imports of crude oil and oil products.
In times of volatility on the world oil markets OPEC and other oil producing nations sometimes seek to prop up falling oil prices. They do this by curtailing output to one degree or another. They manipulate the supply part of the supply and demand equation. Sometimes they react in time, sometimes, when demand drops rather quickly they see their prices fall fast.
While there will be peaks and valleys in demand, OPEC sees demand for oil in China doubling by the year 2030. If their forecasts hold true they foresee 91 million cars in China by then. That's a lot of gas. However, will alternative fuel sources have a bigger role on stage by that time, or is twenty years or so away still to soon for alternative energies to make an impact?
Watch a discussion on the GOLD STANDARD
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