The risk factors surrounding the nation’s oil industry are through the roof. The action is costing unprepared investors a lot of money. For proof, ask Delta Petroleum (NYSE:DPTR) shareholders.
Every country needs a few basic ingredients in order to achieve healthy, sustained economic growth.
BP PLC (NYSE ADR: BP) yesterday (Wednesday) announced a “giant” oil discovery in the Gulf of Mexico that may contain more than 3 billion barrels of oil. The find is evidence of the Gulf’s resurrection as a major oil producer, as well as the great lengths – or depths – to which major oil companies must go to find vibrant wells.
If you’re looking for the next “Big Oil” play, bet on Beijing. As we’ve been reporting for the past several years, China has been on a global commodities shopping spree, which includes locking up every source of oil that it can.
Brazil is making a national commitment to develop energy resources located far offshore in the South Atlantic. Indeed, no nation has ever advanced such an ambitious plan for long-term comprehensive offshore development. And it’s being bankrolled by China.
When most people think of oil, they think of light, sweet crude that comes up out of little holes in the ground. You describe oil by its API gravity. For example, oil like Brent crude or West Texas Intermediate has an API gravity of 38-40. The oil that Col. Drake pulled from the ground at Titusville, Pa., in 1859 had API gravity near 60. These types of oil are relatively easy to pump from a reservoir, lift to the surface and transport via pipeline to the refinery.
Last year, oil prices went crazy. In a matter of weeks, oil shot up as high as $147 and came right back down. Today, oil is sneaking back up. The obvious temptation is to try and time it again. The smart money, however, is looking elsewhere to take advantage. We found the perfect penny play to do just that…
With oil finally trading back above the $50-a-barrel level, it’s time to recognize that crude prices are probably not going to remain low for very long, and may end up fluctuating in the $50-$80 range – regardless of what happens to the prices of other commodities.
If you save for retirement through a 401(k) plan, or have large IRA or Keogh Plan assets, you probably hurled your last statement in the bin. If you’d been making contributions consistently over the last decade, your last annual or monthly statement probably showed that the current value of your plan was well below the amount you had actually invested.
At this point, the temptation to work as long as possible, and then blow what remains of your savings on a round-the-world cruise and a suicide pill is considerable.
However, such despair is unwarranted.
Unless you have already given up all paid employment, or absolutely have to retire in the next year or two, the current bear market may have made your eventual…