Consider the following…

Oil is one of the most important natural resources known to mankind. For most societies in the world, oil is the principal natural resource that fuels their economies. Then why, in this great age of communication and technology, do we need to be concerned about a natural resource like oil? Simple. Nearly 98% of everything you have or do is in some way related to crude oil. Heat for your home, gas for your car, 2 liter plastic bottles for pop, and petroleum jelly are just a few examples of products created from crude oil. The United States has the greatest standard of living in the world, as well as the largest economy. Why? Because we have always tried to maintain control over the supply, as well as price, of oil. Over the last 10 years, the U.S. economy has undergone the largest economic expansion in history and cheap oil has fueled this unprecedented growth. Unlike the 1970s, when the U.S. was held at bay by OPEC withholding oil production for political reasons, the growth of the oil industry during the 1990s, and beyond, will be more likely be determined by the laws of supply and demand. As democracy and capitalism are spreading around the world, global oil consumption is at record levels. Throughout Latin America, Russia, India and Asia, economic growth is accelerating at a remarkable pace; much faster than anything we have seen in the U.S. Recently, Forbes described the development now exploding across Asia. --Forbes

As any astute investor knows, it is extremely difficult during these times to find financial opportunities which provide both security and a solid return on your hard-earned money, Conventional investment in CD’s, savings accounts, money markets, mutual funds, stocks and bonds, etc. are currently bringing less than satisfactory returns. The Wall Street Journal, Forbes, Fortune and other well know financial publications have shown the recent volatility in the financial markets. T he future prospect for profits are even worse when inflation is calculated. Now is the time to diversify your portfolio in hard dollar investments in oil and gas drilling programs. The key to better return is to diversify your portfolio in energy related investments. Take advantage of opportunities which have excellent risk-to-reward ratios while still maintaining you personal and or family financial foundation. Prudent investment in sound, well researched oil and gas programs, can offer a significant monthly cash flow from the sale of oil and gas well production and very significant tax advantages not found with normal investments. With the additional benefits of higher prices, these benefits far exceed gains and tax advantages on energy related stocks.

Oil Clock


Find out how to invest in energy stocks at EnergyAndCapital.com.

Tuesday, May 26, 2009

Oil to ‘Correct’ Drop, Target $77: Technical Analysis


By Christian Schmollinger
May 26 (Bloomberg) -- Crude oil in New York may rise to $77 a barrel over the next several months as futures contracts “correct” the decline from a record $147.27 in July, according to technical analysis from MF Global.

Oil may first climb to $71.75 a barrel, the level reached on Nov. 4, P. A. Rajan, a Singapore-based technical analyst at MF Global, said in a telephone interview yesterday. Crude could reach $77, near the level equal to the so-called Fibonacci retracement of 38.2 percent of oil’s decline from the July record, or $76.28 a barrel.

The gain is part of a so-called correction, or the reverse of a climb or decline, under an Elliot Wave pattern. The wave principle is a theory developed by accountant Ralph Nelson Elliott during the Great Depression. He concluded that market swings, or waves, follow a predictable, five-stage structure of three steps forward, two steps back.

“This oil rally is a correction for the 2008 sell-off,” Rajan said. “We could be in the start of a multi month rally. It’s a larger wave corrective uptrend.”

Oil futures in New York plunged 77 percent from $147.27 a barrel to $33.87 on Dec. 19, the lowest settlement since Feb. 10, 2004. Since then, prices have climbed 80 percent to $61.02. Crude for July delivery was trading down 37 cents, or 0.6 percent, at $61.30 a barrel at 8:17 a.m. in Singapore.

Rajan ascertained the $77 a barrel level based on the ratio between numbers in the Fibonacci sequence. Sometimes known as the golden mean, the ratio is used to find support or resistance as prices retrace rallies or declines between previous highs and lows.
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