Which Month is the Best for Buying Gold?

By Jeff Clark, Senior Precious Metals Analyst

Many investors, especially those new to precious metals, don't know that gold is seasonal. For a variety of reasons, notably including the wedding season in India, the price of gold fluctuates in fairly consistent ways over the course of the year.


This pattern is borne out by decades of data, and hence has obvious implications for gold investors. Can you guess which is the best month for buying gold?

When I first entertained this question, I guessed June, thinking it would be a summer month when the price would be at its weakest. Finding I was wrong, I immediately guessed July. Wrong again, I was sure it would be August. Nope.

Cutting to the chase, here are gold’s average monthly gain and loss figures, based on almost 40 years of data:

Since 1975—the first year gold ownership in the U.S. was made legal again—March has been, on average, the worst performing month for gold. This, of course, makes March the best month for buying gold.

But: averages across such long time frames can mask all sorts of variations in the overall pattern. For instance, the price of gold behaves differently in bull markets, bear markets, flat markets… and manias.
So I took a look at the monthly averages during each of those market conditions. Here’s what I found.

Key point:

The only month gold has been down in every market condition is March.

Combined with the fact that gold soared 10.2% the first two months of this year, the odds favor a pullback this month.

And as above, that can be a very good thing. Here’s what buying in March has meant to past investors. We measured how well gold performed by December in each period if you bought during the weak month of March.

Only the bear market from 1981 to 2000 provided a negligible (but still positive) return by year’s end for investors who bought in March. All other periods put gold holders nicely in the black by New Year’s Eve.
If you’re currently bullish on precious metals, you might want to consider what the data say gold bought this month will be worth by year’s end.

Regardless of whether gold follows the monthly trend in March, the point is to buy during the next downdraft, whenever it occurs, for maximum profit. And keep your eye on the big picture: gold’s fundamentals signal the price has a long climb yet ahead.

Everyone should own gold bullion as a hedge against inflation and other economic maladjustments… and gold stocks for speculation and leveraged gains. The greatest gains, of course, come from the most volatile stocks on earth, the junior mining sector.

Following our recent Upturn Millionaires video event with eight top resource experts and investment pros, my colleague Louis James released his 10-Bagger List for 2014—a timely special report on the nine stocks most likely to gain 1,000% or more this year. Click here to find out more.

The article Gold Is Seasonal: When Is the Best Month to Buy? was originally published at Casey Research.

Check out more "Gold and Crude Oil Trading Ideas"

International Buying & Your Shot at 1,000% Gains

By Jeff Clark, Senior Precious Metals Analyst

 

As a gold investor in North America, it sometimes feels like I'm living in some far off land where everyone believes in fairy tales and unicorns.


Most people around me don't seem to see anything wrong with the Fed creating $65 billion a month out of thin air, hey, it's not $85 billion anymore, what a relief! It's business as usual for the US government to spend billions more than it takes in, and a public debt hovering at $17.2 trillion—up from $7 trillion just 10 years ago—seems no more alarming than a rainbow.

No surprise then that these people don't feel any need to own assets that might help them in times of crisis. Hard assets like…..gold.

I'm reminded of a visit I made to China several years ago. One night, I awoke in the middle of the night—something was crawling under the bed sheet. I shot up like a cannonball, trampolined out of bed, and hit the light switch. I searched and searched for whatever bug had made its way under the sheet, but never did find the little vermin. Still, I was so creeped out, I spent the rest of the night on the couch.

I told the staff the next morning what happened—and they did nothing. They just stared at me. They spoke English, so it wasn't that they didn't understand me. It was just that none of them seemed to think it was a big deal. One of them even chuckled. They obviously didn't appreciate the potential health hazard and had no sense of customer service. I left bemused, wondering how people could accept bedbugs as normal—or even if they did, how they could not care about a customer's experience. It was like being on another planet.

I have some of those same feelings when I think about mainstream investors today. How can they not appreciate the potential financial hazard inherent in something as obviously dangerous as today's unprecedented levels of money printing? How can they not care that they have nothing solid, like gold, at the core of their investment portfolios? It's like these people think they live on Planet Sesame Street.

Most people seem to really believe that today's heavy-handed government interventions are not only the right course of action, but will have no negative fallout. Massive currency dilution, unstoppable tides of rising debt, and never-ending fiscal imbalances are hardly a way to cure decades of money mismanagement, and certainly aren't consequence-free. How is it that this is not obvious to all?

I honestly don't know. Perhaps people are aware at some level, but the truth is just too awful to face, and so people don't.

Very few of my friends and neighbors own any gold. Rarely am I asked about it anymore, even by those who know what I do for a living. The doctor I saw last month gave me the distinct impression I could be doing better things with my money. Most of the mainstream media ignore gold, while many of the big banks loudly proclaim their latest short position as if they had some sort of divine insight.

I'm starting to feel like the proverbial lone voice in the woods….

 

But We're Not Alone!

As deluded as most Americans seem to be, that is definitely not the case for everyone in the world—the Japanese, for example, are much more prudent and levelheaded.

I wonder if my fellow citizens would feel differently if they lived in any of these countries where people have witnessed economic insanity firsthand, and are acting accordingly:

Japan was a net importer of gold in December, the first time in almost four years. Net purchases totaled 1,885 kilograms (60,604 ounces). It was only the tenth time Japan was a net monthly buyer since the end of 2005. There are reports that Japan's pension funds, which hold the world's second-largest pool of retirement assets, are buying gold.

Dubai gold jewelers just reported the strongest gold sales in seven years. Pure Gold Jewelers, one of the largest dealers in the country, reported a 25% increase in gold jewelry sales during the Dubai Shopping Festival this year.

The state of Gujarat in India reported that silver bullion imports hit a five year record from April 2013 to January 2014. Imports were more than 450% higher than the same period a year ago. The Indian government has since hiked the import duty on silver to 15%, the same rate as gold, and official imports in January subsequently fell. Smugglers will surely add silver to all those secret luggage compartments they've been using for gold.

Australia's Perth Mint said gold sales jumped 41% and silver 33% in 2013. In January, gold demand was up 10% and silver 8%.

Mexico's pension funds are now investing in gold after strict investment regulations were recently lifted. The World Gold Council says it spoke to 10 of the country's most influential pension fund managers (with over $160 billion in assets) and was told that they began investing in gold and commodities in 2013.

Central banks were once again big buyers last year. Of those that have reported so far…

• Turkey purchased 150.4 tonnes (4.83 million ounces)
• Vietnam 110 tonnes (3.53 million ounces)
• Russia 57.3 tonnes (1.84 million ounces)
• Kazakhstan 24.16 tonnes (776,762 ounces)
• Azerbaijan 16.02 tonnes (515,054 ounces)
• Sri Lanka 6.51 tonnes (209,301 ounces)
• Nepal 6.22 tonnes (199,977 ounces)
• Ukraine 6.22 tonnes (199,977 ounces)
• Indonesia 4.04 tonnes (129,889 ounces)
• Venezuela 1.87 tonnes (60,121 ounces)

 

And of Course, There's China….

 

Last year's record import number is impressive enough, but it's the pace that's mind-blowing. 1,139 tonnes is…

• More than 2011 and 2012 imports combined.

• Over 42% of global mine production last year.

• Roughly twice as much as the amount GLD sold in all of 2013.

 

Meanwhile, Back in the Good Ol' US of A…

Gold coin demand for 2013 jumped 24%. Some headlines have pointed out that January 2014 gold and silver coin sales were down compared to a year ago—but January 2013 was the all-time record for single-month sales. Further, Eagle and Buffalo gold coin sales were more than double December's sales, and were the highest since last April. Silver coin sales in January were almost four times more than in December.

There, now I feel better.

Even if you sometimes feel like a lone wolf investing in this market, understand that worldwide demand for gold and silver bullion continues unabated. If you live in the US, realize that people in many other countries are seeing more positive headlines about gold, have more friends who own gold, and heck, could even walk into a bank to buy gold.

I don't think the people in these other countries are stupid. Whatever consequences result from the historic levels of currency dilution across the globe, they seem as sure as I do that they'll be good for gold.
What should you buy? I first recommend buying gold and silver bullion to establish a financial safety net. And then, to maximize gains on the more speculative end of your portfolio, you should look at Louis James' just-released "10-bagger List for 2014" in the February issue of International Speculator. A 10-Bagger is a stock with the potential to gain 1,000% or more—that's not a typo, we really did make 10 times our money on junior gold stocks the last time the sector rebounded, and Louis thinks that's about to happen again.

For example, one of those prospective 10-Baggers is a junior with a multimillion-ounce gold project that's run by one of our Explorers League honorees. This company is on the verge of securing the funds needed to build its exceptionally high-margin gold mine, but it's on sale. Speaking of the potential, Louis said: "If the company delivers, it'd be easy to see these 40-cent shares trading for $4" by 2015.

Investing in these stocks, and there are nine of them on Louis' list, could quite literally make you a fortune, but the opportunity to get in on the ground floor is fading fast.

Click here to learn more about Louis' 10 Bagger List for 2014 or watch the recording of our just aired one hour video event "Upturn Millionaires" to learn why the time to act is now.


International Buying & Your Shot at 1,000% Gains

Growing Oil and Natural Gas Production Continues to Reshape the U.S. Energy Economy

The Annual Energy Outlook 2014 reference case was released today by the U.S. Energy Information Administration (EIA) presents updated projections for U.S. energy markets through 2040.

"EIA's updated Reference case shows that advanced technologies for crude oil and natural gas production are continuing to increase domestic supply and reshape the U.S. energy economy as well as expand the potential for U.S. natural gas exports," said EIA Administrator Adam Sieminski. "Growing domestic hydrocarbon production is also reducing our net dependence on imported oil and benefiting the U.S. economy as natural-gas-intensive industries boost their output," said Mr. Sieminski.

Some key findings:

Domestic production of oil and natural gas continues to grow. Domestic crude oil production increases sharply in the AEO2014 Reference case, with annual growth averaging 0.8 million barrels per day (MMbbl/d) through 2016, when domestic production comes close to the historical high of 9.6 MMbbl/d achieved in 1970 (Figure 1). While domestic crude oil production is projected to level off and then slowly decline after 2020 in the Reference case, natural gas production grows steadily, with a 56% increase between 2012 and 2040, when production reaches 37.6 trillion cubic feet (Tcf). The full AEO2014 report, to be released this spring, will also consider alternative resource and technology scenarios, some with significantly higher long-term oil production than the Reference case.

Low natural gas prices boost natural gas-intensive industries. Industrial shipments grow at a 3.0% annual rate over the first 10 years of the projection and then slow to a 1.6% annual growth over the balance of the projection. Bulk chemicals and metals-based durables account for much of the increased growth in industrial shipments. Industrial shipments of bulk chemicals, which benefit from an increased supply of natural gas liquids, grow by 3.4% per year from 2012 to 2025, although the competitive advantage in bulk chemicals diminishes in the long term. Industrial natural gas consumption is projected to grow by 22% between 2012 and 2025.

Higher natural gas production also supports increased exports of both pipeline and liquefied natural gas (LNG). In addition to increases in domestic consumption in the industrial and electric power sectors, U.S. exports of natural gas also increase in the AEO2014 Reference case (Figure 2). U.S. exports of LNG increase to 3.5 Tcf before 2030 and remain at that level through 2040. Pipeline exports of U.S. natural gas to Mexico grow by 6% per year, from 0.6 Tcf in 2012 to 3.1 Tcf in 2040, and pipeline exports to Canada grow by 1.2% per year, from 1.0 Tcf in 2012 to 1.4 Tcf in 2040. Over the same period, U.S. pipeline imports from Canada fall by 30%, from 3.0 Tcf in 2012 to 2.1 Tcf in 2040, as more U.S. demand is met by domestic production.

Car and light trucks energy use declines sharply, reflecting slow growth in travel and accelerated vehicle efficiency improvements. AEO2014 includes a new, detailed demographic profile of driving behavior by age and gender as well as new lower population growth rates based on updated Census projections. As a result, annual increases in vehicles miles traveled (VMT) in light-duty vehicles (LDV) average 0.9% from 2012 to 2040, compared to 1.2% per year over the same period in AEO2013. The rising fuel economy of LDVs more than offsets the modest growth in VMT, resulting in a 25% decline in LDV energy consumption decline between 2012 and 2040 in the AEO2014 Reference case.

Natural gas overtakes coal to provide the largest share of U.S. electric power generation. Projected low prices for natural gas make it a very attractive fuel for new generating capacity. In some areas, natural-gas-fired generation replaces power formerly supplied by coal and nuclear plants. In 2040, natural gas accounts for 35% of total electricity generation, while coal accounts for 32% (Figure 3). Generation from renewable fuels, unlike coal and nuclear power, is higher in the AEO2014 Reference case than in AEO2013. Electric power generation from renewables is bolstered by legislation enacted at the beginning of 2013 extending tax credits for generation from wind and other renewable technologies.

Other AEO2014 Reference case highlights:

• The Brent crude oil spot price declines from $112 per barrel (bbl) (in 2012 dollars) in 2012 to $92/bbl in 2017. After 2017, the Brent spot oil price increases, reaching $141/bbl in 2040 due to growing demand that requires the development of more costly resources. World liquids consumption grows from 89 MMbbl/d in 2012 to 117 MMbbl/d in 2040, driven by growing demand in China, India, Brazil, and other developing economies.

• Total U.S. primary energy consumption grows by just 12% between 2012 and 2040. The fossil fuel share of total primary energy demand falls from 82% of total U.S. energy consumption in 2012 to 80% in 2040 as consumption of petroleum-based liquid fuels falls, largely as a result of slower growth in LDV VMT and increased vehicle efficiency.

• Energy use per 2005 dollar of gross domestic product (GDP) declines by 43% from 2012 to 2040 in AEO2014 as a result of continued growth in services as a share of the overall economy, rising energy prices, and existing policies that promote energy efficiency. Energy use per capita declines by 8% from 2012 through 2040 as a result of improving energy efficiency and changes in the way energy is used in the U.S. economy.

• With domestic crude oil production rising to 9.5 MMbbl/d in 2016, the net import share of U.S. petroleum and other liquids supply will fall to about 25%. With a decline in domestic crude oil production after 2019 in the AEO2014 Reference case, the import share of total petroleum and other liquids supply will grow to 32% in 2040, still lower than the 2040 level of 37% in the AEO2013 Reference case.

• Total U.S. energy-related CO2 emissions remain below their 2005 level (6 billion metric tons) through 2040, when they reach 5.6 billion metric tons. CO2 emissions per 2005 dollar of GDP decline more rapidly than energy use per dollar, to 56% below their 2005 level in 2040, as lower-carbon fuels account for a growing share of total energy use.

Get our "Gold and Crude Oil Trade Ideas"

EIA: By 2040 world energy consumption will rise by 56%

From Robin Dupre at Rigzone.com......

World energy consumption will rise 56 percent in the next three decades, driven by growth in the developing world, noted The Energy Information Administration (EIA) in its International Energy Outlook 2013 report Thursday. China and India’s rising prosperity is a major factor in the outlook for global energy demand, noted EIA Administrator Adam Sieminski in a press conference call.

“These two countries combined account for half the world’s total increase in energy use through 2040. This will have a profound effect on the development of world energy markets.” Energy demand will increase to 820 quadrillion British thermal units (Btu) in 2040, up from 524 quadrillion Btus. By 2040, China’s energy use will double the United States’, according to EIA estimates.

One quadrillion Btu is equal to 172 million barrels of crude oil.

Additionally, renewable energy and nuclear power are the fastest growing source of energy consumption with each increasing by 2.5 percent per year. But fossil fuels, including oil, natural gas and coal will continue to supply almost 80 percent of the world’s energy through 2040, noted Sieminski.

Natural gas is the fastest growing fossil fuel in EIA’s outlook, and will continue to dominate the landscape, increasing by 1.7 percent per year. Swelling supplies of tight gas, shale gas and coalbed methane support growth in projected worldwide gas use with non OECD Europe/Eurasia, Middle East and the United States accounting for the largest increases in natural gas production.

The explosion in supply from unconventional sources will underpin growth of natural gas demand, while high oil prices will encourage countries to focus on liquid fuels “when feasible”, the report stated.

The EIA’s July short term energy outlook projected benchmark Brent crude to average $105 a barrel in 2013 and $100 in 2014.The report projects that prices will increase long term with the world oil price reaching $106 a barrel in 2020 and $163 in 2040 in the Reference case.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

Get our FREE Trading Webinars Today!

America’s Addiction to Foreign Uranium

America’s Addiction to Foreign Uranium

Posted courtesy of our trading partners at Casey Research.........

What most Americans don't realize is that dependence on foreign oil isn't the main obstacle to US energy autonomy. If you think America's energy supply issues begin and end with the Middle East, think again. One of the most critical sources of foreign energy is due to dry up this year, and the results could mean spiking electricity prices across the country.


In 2011, the US used 4,128 billion kilowatt hours (kWh) of electricity. Nuclear power provided 790.2 billion kWh, or 19% of the total electrical output in the US. Few people know that one in five US households is powered by nuclear energy, and that the price of that nuclear power has been artificially stabilized. Unfortunately for us, the vast majority of the fuel used for powering our homes must be imported.
In the chart below, you see where most of our uranium comes from:

The overwhelming majority of that Russian uranium comes from a 20-year-old agreement called "Megatons to Megawatts" that allows weapons-grade, highly enriched uranium (HEU) to be converted to reactor-grade, low enriched uranium (LEU).

By December 2012, "Megatons to Megawatts" had produced 13,603 metric tons of LEU for US consumption and provided the fuel for nearly half of the US electricity generated from nuclear power.
In December 2013, that agreement expires, and Russia will be free to put its uranium out on the open market and demand higher prices. With 17 nuclear reactors in China and 20 in India – not to mention Japan, France, Germany, and others all vying for nuclear fuel – competitive bids are poised to drive prices higher, and early investors stand to make spectacular gains.

If this information is news to you, you are not alone. While the mainstream media focus on the US's "Middle Eastern energy dependence," the real story remains unnoticed. That's why Casey Research invited the field's top experts – including former US Secretary of Energy Spencer Abraham and Chairman Emeritus of the UK Atomic Energy Authority Lady Barbara Judge – for a frank discussion of what we think is America's greatest energy challenge.

Join us on Tuesday, May 21 at 2 p.m. EDT for the premiere of The Myth of American Energy Independence: Is Nuclear the Ultimate Contrarian Investment? to learn how the end of "Megatons to "Megawatts" will affect the US energy sector and how you can position yourself for outsized profits. Attendance is free – click here to register.



The Bible for Commodity Traders....Get our free eBook now!

Is Investing in Electric Cars the Best Way to Invest in Crude Oil?

The United States alone consumes 18.9 million barrels of oil every day, rain or shine. And China's appetite grows more ravenous by the minute, with daily consumption doubling from 5.5 million barrels in 2003 to nearly 9.8 million in 2011.

Aside from a brief downturn during the recession, global oil consumption has been moving inexorably higher.

Worldwide oil consumption passed its pre-recession 2007 peak in 2010 and continues to rise. It is projected to reach 90.2 million barrels per day this year. Meanwhile, the world's oil companies will only produce 90 million barrels per day.

In other words, demand will outstrip supply by 200,000 barrels per day, or by about 73 million barrels this year.

We can barely feed our energy appetite today. And we're getting hungrier. Per-capita consumption in China and India is still less than one-tenth that of the United States, but these growing middle classes are catching up fast. In fact, 18 million new cars hit the road in China last year -- compared with 14.5 million in the United States -- stretching oil supplies even thinner.



Meanwhile, most production grounds have been in a steady decline for decades. Future oil exploration activity will be focused in deep offshore basins, which are expensive to tap.

That's why I'm advising readers to invest in the "Oil of the 21st Century."

I call it this because no other precious resource in the world can do what it does. Businesses are willing to pay hundreds of millions a year for its unique qualities -- it is a key ingredient in a wide range of products, from pharmaceuticals to rocket fuel. But its real magic is that, pound for pound, this featherweight metal can store more electric energy than just about any other material.

I'm talking about lithium.

You see, lithium is the battery maker's best friend. Rechargeable lithium-ion batteries have twice the energy density of yesterday's outdated nickel-cadmium technology, making them indispensible in everyday products from digital cameras to portable video game consoles.

You've probably got some lithium within reach right now. If you own an iPad, iPod or iPhone, you definitely do.

But electronic gadgets aren't why I'm so excited by lithium.

The real action is in cars -- electric cars, to be specific.

President Barack Obama wants to put 1 million electric cars on the road by 2015, and 10 times that amount by 2018. The government is bankrolling the transition with some heavy incentive dollars.

GM is going electric with the Volt. Ford is planning a battery-powered car based on the Focus. And, of course, Toyota has the Prius... Honda the Insight... and Nissan the Leaf.

But car makers won't be the biggest winners from the craze for electric vehicles. Instead, I think there's another way to make even more money from the transition to battery power.

Unlike gold, silver and other metals, it is virtually impossible to invest directly in lithium. The Global X Lithium Exchange Traded Fund (NYSE: LIT), however, is the next best thing.

The fund's three largest positions, or roughly half its portfolio, is invested in companies engaged in lithium mining and refining. These companies have diverse business lines, so these aren't pure plays. But collectively, this trio accounts for the majority of the world's lithium production. The rest of the fund's assets are invested in a well rounded mix of battery makers.

Click here to get your FREE Trend Analysis for LIT

Risks to Consider: In many respects, this industry is still in its infancy. So it's difficult to say which technologies will emerge victorious and which will become historical footnotes. That means there will be some spectacular winners in this field, but also some big losers.


The 2 Energy Sectors You Should Invest in This Year

President Obama Looks into Oil Manipulation … Pure Political Theater

This is just pure political pandering to the masses. The world oil market does not just revolve around the US anymore. India and China are increasing players and are buying more oil in the world markets. It is the demand from the world for energy that is pushing prices higher, not the speculators.

And speaking of higher, crude oil [May contract] closed higher on Tuesday as it extended the rally off last week's low. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish signaling that a low might be in or is near.

Closes above the 20 day moving average crossing at 104.25 are needed to confirm that a short term low has been posted. If May renews the decline off March's high, the 38% retracement level of the October-March rally crossing at 97.84 is the next downside target.

First resistance is the 20 day moving average crossing near 104.25. Second resistance is the reaction high crossing at 105.49. First support is last Tuesday's low crossing at 100.68. Second support is the 38% retracement level of the October-March rally crossing at 97.84.

Get 4 FREE Trading Videos from INO TV!

India Anticipates $76 Billion Investment in Oil and Gas Sector

India expects INR3.90 trillion ($76 billion) to be invested developing its oil and gas sector from April 2012 to March 2017, the country's junior oil minister said Tuesday.

The development plan includes exploration, production, refining, marketing, storage, petrochemicals and related engineering activities to increase availability of petroleum and petroleum products, RPN Singh said in a written reply to lawmakers in the upper house of Parliament.

India currently meets 80% of its total crude needs through imports. Crude oil imports accounted for 29% of its total import bill of $350 billion in the year ended March 31. Imports are expected to surge over the next few years as an expanding economy drives demand for fuel products, pressuring the country's fiscal position.....Read the entire article.


Is This December Similar to 2007 & 2008 for Gold & Stocks?

Narrow Trading Continues Ahead of US Retail Sales

Commodities continue to in a consolidative manner in European session after Friday's selloff as the market awaits the next step the Chinese government walks in curbing inflation. Investors also hold breath as Ireland will discuss with EU officials on its financial problems in Brussels tomorrow. The front-month contract for WTI crude oil price hovers around 85 while fuel prices also grind higher. Gold changes little, trading below 1380 in both Asian and European session. PGMs extend weakness with platinum and palladium plunging below 1680 and 670 respectively.

Worries about Chinese tightening have weighed on oil and base metal prices as the government's measures, such as rate hike and raise in RRR, limit investments and hence, demand for these commodities. Indeed, China's impacts extend to precious metals. Recall that when the People's Bank of China raised near term interest rates last month (October 19), gold price slumped with the benchmark COMEX contract falling from 1371.7 to 1328 on that day. The impacts on PGMs will be as big as base metals as China is the world's largest auto producer and consumer.

According to Bombay Bullion Association, India’s gold imports jumped +65% y/y in October as driven by Diwali. India’s demand for other commodities such as oil and agricultural products should also surge in coming years. EIA’s Short-term Energy Report forecast annual growth in oil demand in India will be +7.95% in 2010 and +4.21% in 2011. The pace will exceed that of China (2010:+4.26%; 2011: 0.00%) although the absolute amount is still small.

Posted courtesy of Oil N Gold.Com


Share

Alexander Smith: Crude Oil Is Spiking - Are You Positioned?

The domestic oil and gas sector has been under intense pressure to discover new resources and increase supply. A renewed emphasis on domestic, on-shore drilling has revitalized the industry from coast to coast in North America. To add to the pressure, demand from developing nations will soon exceed even the wildest predictions of only a few years ago. China, India and Brazil will be three of the largest emerging economies set to impact the global supply of oil.


China has overtaken the United States as the largest automaker in the world. There are millions of Chinese buying their first car every year and this trend will only increase. China has emerged as the world's third largest net importer of oil. Just 15 years ago it was a net exporter. It is currently the second largest consumer of oil behind the United States.


In August, China consumed an estimated 35.54 million metric tons of oil, or an average of 8.40 million barrels per day. This pales in comparison to the United States which consumes over 20 million barrels per day, but a dangerous trend is emerging. See the chart below which documents a net increase of 3,328% of oil consumption in China over the past 40 years. With China's middle class emerging at a faster rate than ever before, the next decade could be unforgettable for the oil markets. Are you positioned?


Although renewable energy sources have been making up some ground recently, there are thousands of applications oil is used for and many of them have no substitute. We are many years away from renewable energies taking hold of even a small percentage of the market share (from primary sources of fossil fuel demand).......Read the entire article.



Let’s Get Some in South America….New Video: Let The Carnival Begin!


Share

ONGC, Indian Oil Share Sales May Raise $4.1 Billion for Indian Government

India may raise as much as 190 billion rupees ($4.1 billion) selling shares in Oil & Natural Gas Corp., the country’s biggest energy explorer, and Indian Oil Corp., to help cut its budget deficit. Indian Oil, the nation’s second biggest refiner, may raise a further 100 billion rupees by selling fresh equity to help it fund a new crude oil processing plant it is building, Oil Secretary S. Sundareshan told reporters in Mumbai today.

“The plan is to complete the disinvestments before the end of the fiscal year,” Sundareshan said. “It will be Indian Oil followed by ONGC. In the last quarter, hopefully.”

Prime Minister Manmohan Singh wants to raise 400 billion rupees from asset sales in the year ending March 31 to help fund the construction of roads, ports, hospitals and schools. The government said in January it can sell shares in as many as 68 companies as it seeks to shrink its budget deficit to 5.5 percent of gross domestic product this fiscal year from an estimated 6.9 percent last year.

Indian Oil is building a refinery in Orissa state with an annual processing capacity of 15 million tons. The refiner plans to spend 145 billion rupees in the financial year ending March compared with 135 billion rupees last year to increase capacity, Serangulam V. Narasimhan, finance director, said Jan. 6.

ONGC will complete the valuation on BP Plc’s assets in Vietnam in a few weeks as it seeks to buy them in partnership with Vietnam Oil & Gas Group, Sundareshan also said.

State owned ONGC is considering all options for buying partner BP’s stake in a Vietnam gas field, Chairman R.S. Sharma said July 22. The London based company, which is raising funds to pay for the Gulf of Mexico oil spill, agreed July 20 to sell fields in the U.S., Canada and Egypt to Houston based Apache Corp. for $7 billion and plans to dispose of assets in Pakistan and Vietnam.

Bloomberg reporter Natalie Obiko Pearson can be reached at npearson7@bloomberg.net.



Share