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Oil prices

The Link Between Gold and Oil

Gold and crude oil prices tend to rise and fall in sympathy with one another. There are two reasons for this:

Historically, oil purchases were paid for in gold. Even today, a sizable percentage of oil revenue ends up invested in gold. As oil prices rise, much of the increased revenue is invested as it is surplus to current needs and much of this surplus is invested in gold or other hard assets. 

Rising oil prices place upward pressure on inflation. This enhances the appeal of gold because it acts as an inflation hedge.

How many barrels of oil you can buy with an ounce of gold:

Gold-Oil Ratio =

Price of Gold (per oz.) / Price of Crude Oil (per barrel)

Signals

The gold-oil ratio identifies:

• Buying opportunities (for gold) when the gold-oil ratio turns up at/below 10 barrels/ounce; and
• Selling opportunities when the gold-oil ratio turns down at/above 20 barrels/ounce.

 

 

Oil prices continue slide after big drop Tuesday amid mild U.S. weather

Canadian Press

Published: Wednesday, December 27, 2006

http://www.canada.com/topics/finance/story.html?id=9e203bb3-77fe-47d5-8fdc-3f13e1c38d05&k=69235

 

Democrats Eye Oil Money for Conservation


Wednesday December 27, 2006 3:31 AM

http://www.guardian.co.uk/worldlatest/story/0,,-6304717,00.html

 

 

Oil related counters might return to slumberland.
sigh...

 

Oil prices slide below US$61
Posted: 28 December 2006 0442 hrs

http://www.channelnewsasia.com/stories/afp_world_business/view/249459/1/.html

 

ASL Marine has "woken up"!

 

I strongly believe the petrochemical industry is still going to be hot for the next 3 years. 

 

most of my dough is on SPC.

but ASL Marine looks good too.

 

ASL Marine should be a good buy now too

 

Oil Rises After Iran Vows to Defy UN Sanctions on Nuclear Work


By Hector Forster

Dec. 26 (Bloomberg) -- Crude oil rose after Iran, the Middle East's second-largest exporter, said it will defy United Nations sanctions and pursue nuclear research.

The UN Security Council unanimously voted on Dec. 23 for sanctions on Iran for refusing to suspend uranium enrichment. President Mahmoud Ahmadinejad said the following day that the world will have to accept Iran as a nuclear country. Violence in Nigeria added to concern that global supply may be disrupted.

``While the situation in Iran continues, prices may test $65 a barrel,'' said Makoto Takeda, an energy analyst at futures broker Bansei Securities Co. in Tokyo. ``We may need to see actual disruptions to supply for prices to go higher.''

Crude oil for February delivery rose as much as 79 cents, or 1.3 percent, to $63.20 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $62.94 at 11:18 a.m. London time.

Crude oil futures didn't trade in New York yesterday because of the Christmas holiday.

Brent oil for February settlement rose as much as 88 cents, or 1.4 percent, to $63.3 a barrel in electronic trading on the ICE Futures exchange in London. It was at $63.07 a barrel at 11:19 a.m.

Iran's Ahmadinejad rejected on Dec. 24 the UN resolution imposing sanctions on his country as a ``scrap of paper.'' The measures included a ban on materials that could be used to build a nuclear bomb. The U.S. and other nations allege Iran aims to acquire atomic weapons, a claim Iran denies.

Hormuz Strait

``Oil is highly vulnerable to the political developments,'' Stephan Jansma, head of energy for Asia at Rabobank International in Singapore, said in a Dec. 21 interview broadcast today.

Iran is the second-biggest producer in the Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's oil. It sits on one side of the Strait of Hormuz, the waterway through which the United Arab Emirates, Saudi Arabia and Kuwait ship most of their crude exports.

``There's a surfacing of geopolitical risks in Iran and also Nigeria,'' said Hiroyuki Kikukawa, associate director of research at Nihon Unicom Corp. in Tokyo.

The Movement for the Emancipation of the Niger Delta, or MEND, a Nigerian group that has claimed responsibility for previous attacks on facilities belonging to Royal Dutch Shell Plc and Eni SpA, said it planted a car bomb in Port Harcourt in the nation's main oil producing region on Dec. 23.

Four Eni workers kidnapped this month by armed militants in Nigeria will be killed if the Italian oil company tries to pay ransom for their freedom, Il Giornale reported on Dec. 24, citing MEND spokesman Jomo Gbomo.

Kidnapped Workers

The three Italians and one Lebanese will be freed in exchange for the release of four prisoners being held in Nigerian prisons, Gbomo said. No negotiations with his group are currently taking place, he said.

OPEC plans to cut output by 500,000 barrels a day as of Feb. 1 in addition to the 1.2 million barrel-a-day cut agreed on Oct. 20.

Abu Dhabi National Oil Co. will cut exports of three of its crude oil varieties by between 3 percent and 5 percent in February to comply with OPEC production cuts, the company said in a faxed statement.

Crude oil fell last week on speculation that warmer-than-usual weather in the U.S. would limit demand for heating oil.

Home-heating demand in the Northeast, which accounts for 80 percent of U.S. heating-oil use, will be 26 percent below normal in the week through Dec. 29, according to Weather Derivatives, a Belton, Missouri, forecaster.

``Without a cold snap covering the U.S. Northeast and demand for heating oil rising it may be difficult for prices to gain much further,'' said Bansei's Takeda.

U.S. inventories of distillates, a category that includes heating oil, rose 1.2 million barrels in the week ended Dec. 15, the first increase since September, the Energy Department said on Dec. 20.

To contact the reporter on this story: Hector Forster in Tokyo at hforster@bloomberg.net . Last Updated: December 26, 2006 06:33 EST

 

South Korea has opened the world's largest garbage-fuelled power plant and expects to reduce its imports of heavy oil by 500,000 barrels a year as a result.
 


The 50-megawatt plant, designed to provide power to more than 180,000 households, began operating on Tuesday. It sits on a mammoth garbage dump in the city of Incheon west of Seoul, the ministry said in a statement.



For fuel, it uses only the methane gas naturally generated from the decomposing garbage on the site.



"It reduces greenhouse gas emissions by burning away methane and avoids buring more fossil fuel for electricity," Park Han-Eop, an official of the ministry's waste treatment division, told AFP.



The plant will save the country the import of 500,000 barrels of heavy oil and will reduce greenhouse gas emissions by 1.37 million tonnes per year, he said.



South Korea has 12 other landfill gas power plants either being built or operating across the country. They are mostly small-sized plants producing one to six megawatts.



South Korea currently relies heavily on nuclear power plants which supply 40% of demand. It imports all its oil needs.

 

OPEC ministers agreed in principle Thursday to leave oil production unchanged for now but set the stage for a likely cut of half a million barrels a day in February, delegates to the group's year-end meeting said.



Oil prices rose in response. Light, sweet crude for January delivery was up 18 US cents at US$61.55 a barrel on the New York Mercantile Exchange.

 

Which is the cheapest way i can own

gold using CPF?

 

Just added more UTs on 1st state Global Resource. too bad cant buy Gold funds with CPF OA. Gold is ripe for breakout..

 

time to buy SPC! and oil related play..

 

Texas oilman T. Boone Pickens told central Arkansas business leaders Monday that the world has reached peak oil production and the United States, in particular, needs to find alternative sources of fuel.



About 85 million barrels of oil are produced a day throughout the world, Pickens said. But because there are probably not any large, undiscovered oil fields left, the increasing demand for oil is rapidly diminishing the remaining supply, he said.



"Eighty-five million barrels is peak," Pickens said. "Will we find more oil? I think so, but we're going to have to go to alternative sources of fuel."



Pickens said about half the world's supply of 2 trillion barrels of oil had been used by 2000, and because the world has become so dependent on oil, it is likely that the supply could run out in the next 30 to 40 years.



The increase in demand will also force an increase in prices, he said. Pickens said he believes oil prices will average at US$70 a barrel in 2007. To counteract rising costs, Pickens said the U.S. needs to first consider how to become more efficient with its oil consumption, while working on finding the best options for alternative fuels.



"The Achilles heel of the United States is that we're using 20% of the oil in the world a day and we have less than 5% of the oil supply," Pickens said. "We've about had it." Natural gas, ethanol and biodiesel are all viable alternative fuel sources, Pickens said, but more research needs to be done to understand how to best utilize them.



Pickens said he believes natural gas shouldn't be used for power generation, but instead should be used to fuel vehicles. He said more cities could follow the example of Los Angeles and use natural gas-fueled garbage trucks. The city will have 2,500 garbage trucks running on the clean-burning fuel by the end of the year, he said. Cleaner-burning fuels like natural gas may also help stem global warming, Pickens said.



"There's no question the climate is warming," Pickens said. "And I don't think you can do anything wrong in slowing the emissions."

 

Oil price falls again ....... Looks like I was wrong to predict a coming higher oil due to northern winter. Anyway, low oil is great news for the stock markets!

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Thursday November 23, 9:19 PM

World oil prices fall further

World oil prices have fallen further, after shedding nearly a dollar per barrel on Wednesday on data showing an unexpectedly big rise in US stockpiles in the past week.

By 1115 GMT on the New York Mercantile Exchange (Nymex), a barrel of "light sweet crude" for delivery in January was showing a fall of 31 cents to 58.93 dollars, following a drop of 93 cents on Wednesday.

In London, Brent North Sea crude contracts for January delivery lost 37 cents to 59.12 dollars, following a fall of 90 cents on Wednesday.

The US Energy Information Administration (EIA) said crude oil stocks rose by 5.1 million barrels last week to total 341.1 million -- well above average levels. The market expected a gain of around 600,000 barrels.

The gains came amid a rise of 1.0 million barrels a day in imports in a week when bad weather led to supply disruptions at the Louisiana Offshore Oil Port (LOOP) and at the Valdez export terminal in Alaska.

The EIA also reported a 1.2-million barrel fall in distillate stocks, which include the key winter heating oil fuel. The fall, which leaves stocks at above average levels, was in line with market expectations.

Surprised by the resurgence in crude stocks, dealers started selling and the price continued to fall early Thursday in a market that was muted because of the Thanksgiving holiday in the United States.

"Crude futures were lower this morning still under pressure from a surprisingly large build in US inventories," said Michael Davies, analyst at Sucden on Thursday.

The price also fell amid the dissipation of fears over a disruption in exports from Alaska, where bad weather cut supplies sharply through the Trans-Alaskan Pipeline.

"Major damage has been done to the long-term uptrend and it is unlikely oil will make a rapid recovery," according to a statement from technical analysts at Barclays Capital bank. "Expect weakness to eventually extend towards 55."

The price has been hovering around 60 dollars per barrel since October. In New York, prices last week hit the lowest level since June 2005, dropping below 55 dollars.

With the mid-December meeting of the Organization of Petroleum Exporting Countries (OPEC) approaching, investors remained skeptical about statements of intent from the cartel, which accounts for 40 percent of the world's crude.

Energy Minister Rafael Ramirez of Venezuela, a founding OPEC member, told Venezolana television that OPEC would agree on a new cut in oil production at a meeting in Nigeria next month.

The new cut "will be proposed ... because (oil) price remains unstable," he said. "In December there will be consensus to continue acting on volume," he said, without indicating by how many barrels OPEC would cut production.

On Monday, Nigeria's oil minister Edmund Daukoru issued similar remarks which are likely aimed at reviving prices, or at least stablizing them, a drop in supply automatically raises prices.

But doubts remain over whether OPEC can hold back production.

OPEC decided last month to cut production by 1.2 million barrels per day from the start of November in order to support weakening prices, which have shed around 20 dollars since last August.

However, the effects of the announcement have yet to materialize.

--------------

 

Crude oil prices rose Thursday a day after jumping more than US$2 a barrel in response to a report that showed U.S. inventories dropped last week. OPEC's steps to cut production and attacks by Nigerian villagers on oil facilities also contributed to the increase. 



Light, sweet crude for December delivery was up 25 cents to US$61.65 a barrel in Asian electronic trading on the New York Mercantile Exchange.



Though global oil supplies are still relatively ample and some skepticism remains about OPEC's willingness to go through with the 1.2 million barrel-a-day reduction it announced late last week, traders were betting on tightening supplies going into the winter, when fuel demand ramps up.



Oil prices had fallen to an 11-month low below US$57 a barrel Friday -- even after the 11-member Organization of Petroleum Exporting Countries decided to reduce its daily production by a larger-than-anticipated amount of 1.2 million barrels -- amid doubts about the cartel's ability to implement the decision to cut daily production.