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.

Wednesday, August 19, 2009

Oil Settles Above $72 on Surprise Drop in US Crude Supplies


By: Reuters | 19 Aug 2009 | 02:51 PM ET
Oil prices surged nearly 5 percent to settle above $72 Wednesday after U.S. government data showed a steep drop in crude imports and inventories in top consumer the United States.

U.S. crude stockpiles plunged by 8.4 million barrels in the week to Aug. 14 — against analysts' forecasts for a build — as imports dropped to the lowest level since September 2008 and refiners hiked runs, according to data released by the U.S. Energy Information Administration.

Gasoline inventories also showed a bigger-than-expected drop, while distillate stockpiles showed a surprise drop.

"The data is being viewed as bullish as all stock categories fell more than expected," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

The data helped push U.S. light, sweet crude [US@CL.1 72.23 3.04 (+4.39%)] up $3.23, or 4.67 percent, to settle at $72.42 a barrel. London Brent crude [GB@IB.1 74.37 2.00 (+2.76%)] rose $2.22 to settle at $74.59 a barrel.

"When WTI is so much weaker than Brent, it closes the arbitrage. Even ships that are already loaded up with crude can be rerouted to other markets where prices are looking more attractive," said Addison Armstrong, director of Research for Tradition Energy in Stamford, Connecticut.

Further the American Petroleum Institute (API) said U.S. oil demand in July showed signs of improvement, with demand down 3 percent year-on-year last month compared with an average drop of around 6 percent in the first half of 2009.

"I think these (demand) changes are reflective of an improving economy, but one must be cautious because these changes are versus year ago weak numbers," said API chief economist John Felmy.

Slumping demand due to the global economic crisis sent crude oil prices off record high prices near $150 a barrel hit in July 2008 to below $33 a barrel in December. Expectations for a potential rebound in the economy could increase fuel consumption and have helped lift prices.

Oil prices had fallen earlier on Wednesday, hitting a low of $68.05 after a near 5 percent slump in Chinese shares sent doubts rippling through global markets about the strength of the world economic recovery.

U.S. stocks rose as energy shares jumped following the EIA data, while the dollar fell.

Traders also watched for storms in the Atlantic Basin but there was no immediate threat seen to U.S. oil installations in the Gulf of Mexico.

Powerful Hurricane Bill, a dangerous Category 4 storm with 135 mph (215 kph) winds, raged across the open Atlantic on Wednesday, days from land but on a path that could menace Canada's eastern province next week.
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