Germany has several large Pipeline systems that deliver crude Oil from import terminals along its northern coastline to inland refineries. The 440-mile Minveraloelverbungleitung (MVL) connects the cities of Rostock, Schwedt, and Spergau in eastern Germany.
Majority-owned by France�s Total, MVL supplies oil refineries in Schwedt and Spergau with Crude Oil from an oil terminal at Rostock, with a capacity of 380,000 bbl/d. MVL also connects with the Druzhba crude oil pipeline from Russia at the Poland-Germany border, near Schwedt.
The Norddeutsche Oelleitung (NDO) crude oil pipeline in northern Germany connects an oil terminal and refinery in Hamburg with an oil terminal in Wilhelmshaven. The 90-mile NDO has a capacity of 150,000 bbl/d. Another crude oil pipeline, the 240-mile, 300,000-bbl/d Nord-West Oelleitung (NWO), connects Wilhelmshaven with Wesseling, near Cologne, supplying oil refineries in the area.
According to Oil and Gas Journal (OGJ), Germany has 9.9 trillion cubic feet (Tcf) of proven Natural Gas reserves, the third largest in the EU, after the Netherlands and the United Kingdom. Almost all of Germany�s natural gas reserves and production occur in the northwestern state of Niedersachsen, between the Wesser and Elbe rivers.
Germany�s sector of the North Sea also contains sizable natural gas reserves, currently supporting the A6-B4 production project (see below). However, environmental regulations have curtailed the complete exploration of the area.
Germany began to liberalize its natural gas sector in the late 1990s in order to comply with EU directives. Unlike other EU countries, though, Germany did not establish a national regulator for the liberalized natural gas sector. Rather, it relied upon negotiated access between suppliers, distributors, and transmission companies.
Without transparent open access to the system, several large companies came to dominate the sector. In July 2005, Germany approved a new energy bill that vested regulatory oversight of the natural gas sector with the Bundesnetzagentur (BNA), an existing agency that also regulated the telecommunications and the postal system.
Private operators control Germany�s natural gas production. BEB, jointly owned by Royal Dutch Shell and Esso (a subsidiary of ExxonMobil), controls about half of domestic natural gas production. Other important players include Mobil Erdgas-Erdoel (also a subsidiary of ExxonMobil), RWE, and Wintershall.
The largest wholesale distribution company in Germany is E.ON Ruhrgas, controlling about one-half of that market. Germany�s wholesale distributors also control most of the national natural gas transport network. Finally, there are thousands of small, independent companies active in the retail distribution sector, many wholly- or partly-owned by municipal governments.
Germany has one of the largest economies in the world, with a 2004 nominal gross domestic product (GDP) of $2.7 trillion. However, in recent years, a combination of high unemployment and sluggish domestic demand has dampened German economic growth. The country posted real GDP growth of 1.6 percent in 2004, after GDP contracted by 0.7 percent in 2003.
In 2003, Germany produced 780 billion cubic feet (Bcf) of Natural Gas. The country is the third largest producer in the EU, behind the United Kingdom and the Netherlands. Production has risen slightly since 1991, but the lack of new discoveries in the country could hinder future production growth.
Over 90 percent of Germany�s natural gas production occurs in Niedersachsen. Germany also operates a single offshore natural gas field, A6-B4, located in the North Sea. Operated by Wintershall, A6-B4 came onstream in September 2000, and the project currently produces about 46.8 Bcf of natural gas per year.
In 2003, Germany produced 780 billion cubic feet (Bcf) of natural gas. The country is the third largest producer in the EU, behind the United Kingdom and the Netherlands. Production has risen slightly since 1991, but the lack of new discoveries in the country could hinder future production growth.
Over 90 percent of Germany�s natural gas production occurs in Niedersachsen. Germany also operates a single offshore natural gas field, A6-B4, located in the North Sea. Operated by Wintershall, A6-B4 came onstream in September 2000, and the project currently produces about 46.8 Bcf of natural gas per year.
Germany�s domestic Natural Gas transmission network facilitates the movement of natural gas from import terminals to its interior consumption centers. Wingas operates the 440-mile Mitte-Deutschland-Anbindungs-Leitung (MIDAL) system, which runs the length of the entire country and connects the North Sea coast with Kahrlsruhe.
With a capacity of 1.2 Bcf per day (Bcf/d), MIDAL allows Germany to import natural gas from Norway through receiving terminals in Emden and Dornum. Also linking the North Sea coast with the interior is the Norddeutsche Erdgas Transversale (NETRA), a 210-mile, 2.1 Bcf/d system operated by a consortium led by E.ON Ruhrgas. NETRA links the Emden and Dornum receiving terminals with eastern Germany.
As of 2003, Germany had 7.4 billion short tons (Bst) of recoverable Coal reserves. Over 97 percent of these coal reserves are lignite (brown coal), with the remainder composed of bituminous and anthracite (hard coal). Brown coal is Germany�s most important domestic energy source. According to Statistik der Kohlenwirtschaft, a German coal industry association, brown coal production represents over 40 percent of Germany�s total domestic energy production.
Coal is an important part of Germany�s energy consumption mix, meeting 24 percent of Germany�s total energy needs in 2003.
At the present time, Iran continues to maintain that regional treaties signed in 1921 and 1940 between Iran and the former Soviet Union, which call for joint sharing of the Caspian's resources between the two countries, remain valid. Iran has rejected as invalid all unilateral and bilateral agreements on the utilization of the Sea. As such, Iran is insisting that either the Sea should be used in common, or its floor and water basin should be divided into equal (20 percent) shares. Under the so-called "condominium" approach, the development of the Caspian Sea would be undertaken jointly by all of the littoral states. However, using the equidistant method of dividing the seabed on which Kazakhstan, Azerbaijan, and Russia have agreed, Iran would only receive about 12-13 percent of the Sea.
As of early December 2005, no agreement has been reached among Caspian Sea region states on this matter. In March 2003, Iran and Turkmenistan had noted "the need to achieve a consensus between the five [littoral] countries," while the two countries reportedly moved ahead in charting their common border in the Sea.
One area considered to have potential is located near the Strait of Hormuz. Another interesting area is offshore near Bushehr, where Iran claimed in July 2003 to have discovered three fields with potentially huge - 38 billion barrels oil reserves. In May 2004, Brazil's Petrobras signed a 3-year, $32-$34 million deal to develop the Tousan fields of the Persian Gulf.
In late 2001 and early 2002, Shell brought part of the $800 million Soroush-Nowruz development online, with production reaching 190,000 bbl/d in June 2005. The two fields are located offshore, about 50 miles west of Kharg Island, and contain estimated recoverable reserves of around 1 billion barrels of heavy oil (20° API). The heaviness and high sulfur content (3 percent) of the oil has made marketing Soroush-Nowruz oil difficult; in September 2005, Iran reportedly diverted Soroush-Nowruz production into storage rather than try to sell it at a steep discount. In addition, there were reports in early October 2005 of technical difficulties at the oil fields, reducing production to 100,000 bbl/d for a time.
In March 2004, the Iranian Offshore Oil Company (IOOC) awarded a $1.26 billion contract for recovery of NGLs and Natural Gas from Soroush, Nowruz, Foroozan, and Abuzar to Japan's JGC Corporation. Ethane from the gas will feed an ethylene complex at the Kharg petrochemical complex. Iran reportedly hopes to become a major Petrochemicals producer within 10 years.
The buyback system has drawbacks for both sides: by offering a fixed rate of return (usually around 15-18 percent), NIOC bears all the risk of low Oil prices. If prices drop, NIOC has to sell more oil or Natural Gas to meet the compensation figure. At the same time, companies have no guarantee that they will be permitted to develop their discoveries, let alone operate them. Finally, companies do not like the short terms of buyback contracts. In response, Iran has considered revisions to buyback terms (e.g., extending the length of contracts, allowing for continued involvement of oil companies after the field is handed over to NIOC), but these have been controversial and generally have not moved forward. In early December 2005, acting Iranian oil minister, Kazem Vaziri, questioned the future of buyback contracts but emphasized that Iran would continue to seek foreign investors in the energy sector.
In March 1999, France's Elf Aquitaine and Italy's Eni/Agip were awarded a $1 billion contract for a secondary recovery program at the offshore, 1.5-billion-Barrel Doroud oil and natural gas field located near Kharg Island. The program is intended to boost production from around 136,000 bbl/d to as high as 205,000 bbl/d. Total is Operator of the project, with a 55 percent share, while Eni holds the other 45 percent.
In April 1999, Iran awarded Elf (46.75 percent share), along with Canada's Bow Valley Energy (15 percent share), a buyback contract to develop the offshore Balal field. Eni is also involved, with a 38.25 percent stake. The field, which contains some 80 million barrels of reserves, started producing at a 20,000-bbl/d rate in early 2003, and reportedly reached 40,000 bbl/d in February 2004.
Iran exports around 2.7 million bbl/d, with major customers including Japan, China, South Korea, Taiwan, and Europe. Iran's main export blends include Iranian Light (34.6° API, 1.4 percent sulphur); Iranian Heavy (31° API, 1.7 percent sulphur); Lavan Blend (34°-35° API, 1.8-2 percent sulphur); and Foroozan Blend/Sirri (29-31° API). Iran's domestic oil consumption, 1.5 million bbl/d in 2005, is increasing rapidly as the economy and population grow. As mentioned above, Iran subsidizes the price of oil products heavily, resulting in a large amount of waste and inefficiency in oil consumption.
State-owned National Iranian Oil Company (NIOC)'s onshore field development work is concentrated mainly on sustaining output levels from large, aging fields. Consequently, enhanced oil recovery (EOR) programs, including Natural Gas injection, are underway at a number of fields, including Marun and Karanj. Overall, Iran's oil sector is considered old and inefficient, needing thorough revamping, advanced technology, and foreign investment.
In February 2004, a Japanese consortium led by Inpex signed a final agreement on the $2 billion Azadegan oilfield development project. Azadegan was discovered in 1999, representing Iran's largest oil discovery in 30 years, and is located onshore in the southwestern province of Khuzestan, a few miles east of the border with Iraq. Reportedly, Azadegan contains proven crude oil reserves of 26 billion barrels, but the field is also considered to be geologically complex, making the oil more challenging and more expensive to extract. In January 2001, the Majlis approved development of Azadegan by foreign investors using the so-called "buyback" model (see below).
Inpex, which has no Upstream experience of its own, hopes to bring in an international partner - possibly Total, Statoil, Sinopec, or Lukoil (Shell has indicated that it is not interested) - as the field's Operator. Initial production of medium-Sour Crude oil from Azadegan could come in 2007, ramping up to 260,000 bbl/d by 2012. At its peak, Azadegan production could account for as much as 6 percent of Japan's oil imports. However, as of early December 2005, little forward progress had been made on Azadegan, including the lack of an operating agreement with NIOC, possibly due to financial and/or political issues (e.g., US sanctions against Iran, the absence of an Iranian oil minister). In September 2005, Iran sharply criticized Japan for the slow progress.
Since August 1996, the Iran-Libya Sanctions Act (ILSA) has imposed mandatory and discretionary sanctions on non-U.S. companies that invest more than $20 million annually (lowered in August 1997 from $40 million) in the Iranian Oil and Natural Gas sectors. On August 3, 2001, President Bush signed into law the ILSA Extension Act of 2001.
This provided for a 5-year extension of ILSA with amendments that affect certain of the investment provisions. In addition, the United States has maintained various sanctions against Iran since 1979, following the seizure of the U.S. embassy in Tehran on November 4 of that year. In 1995, President Clinton signed two Executive Orders prohibiting U.S. companies and their foreign subsidiaries from conducting business with Iran.
Executive Order 12957 specifically banned any "contract for the financing of the development of Petroleum resources located in Iran." On March 10, 2005, President Bush extended sanctions for another year, citing Iran's "continued support for terrorism, its efforts to undermine the Middle East peace process and its efforts to acquire weapons of mass destruction."
In April 2004, the United States removed Libya from the ILSA sanctions, following fulfillment of that country's commitments to rid itself of weapons of mass destruction and to renounce terrorism. On September 20, 2004, the President signed an executive order terminating the national emergency (declared in Executive Order 12543 of January 7, 1986), with respect to the policies and actions of the Government of Libya, revoking Executive Order 12544 of January 8, 1986 and Executive Order 12801 of April 15, 1992, all of which imposed sanctions against Libya in response to the national emergency.
The new September 2004 executive order also revokes Executive Order 12538 of November 15, 1985, which prohibited the importation into the United States of petroleum products refined in Libya. This lifting of sanctions has opened the door to a potential return of U.S. oil companies to Libya for the first time in nearly 20 years.
Besides Iran, the United States maintains sanctions on two other oil producing nations - Sudan and Syria. For more information on these sanctions, please see EIA's Global Energy Sanctions report.
n the Persian Gulf, Iraq has three tanker terminals: Basra port (formerly known as Mina al-Bakr), Khor al-Amaya, and Khor az-Zubair (which mainly handles dry goods and minimal Oil volumes, plus Natural Gas liquids and liquefied Petroleum gas). Basra is Iraq's largest oil terminal, with two pipelines (48-inch and 41-inch), plus four 400,000-bbl/d capacity berths capable of handling very large crude carriers (VLCCs).
Gulf War damage to Basra appears to have been repaired in large part and the terminal reportedly was handling around 1.6 million bbl/d in mid-October 2004. Basra's nameplate loading capacity is 85,000 barrels per hour (around 2 million bbl/d), which is significantly above current capacity of about 50,000 barrels per hour (around 1.2 million bbl/d), suggesting that potentially higher volumes of oil than the nameplate capacity could be shipped out of the port.
On April 24, 2004, a suicide attack against Basra port damaged one tanker berth in the first such attack on Iraq's Persian Gulf export terminals since the onset of war in March 2003. On September 22, 2004, the Iraqi Oil Ministry signed a $15 million contract with Sinopec to build eight oil storage tanks, with a total capacity of 350,000 barrels, on the Faw Peninsula in southern Iraq.
Iraq's Khor al-Amaya terminal was heavily damaged by Iranian commandos during the Iran-Iraq War and also during Operation Desert Storm in 1991. In early March 2004, Khor al-Amaya reopened for oil exports, with initial capacity of 12,000 barrels per hour (300,000-400,000 bbl/d). Upon full completion of repairs, Iraq projects Khor al-Amaya's capacity is expected to reach 1.2 million bbl/d.
The subsea segment of the oil and gas industry is the by far the fastest growing industry in the world today. The global turnover is expected to grow by 30% from today towards 2011. This creates opportunites for companies that are not part of this booming oil anmd gas industry today..
Gold futures quotations showed a small upturn on Monday with the support from other raw goods and stock indexes prices, however, the market trading volume was low.
December Gold futures in followup of COMEX trading up by 2,50 dollars to 994,10 dollars per ounce.
The deals were rather calm and low-key due to Iom-Kipur holiday. The Gold was supported by purchases amid the stock indexes uprise, as well as purchases of other raw goods after the copper price surge from the minimums. The yellow metal was also backed up by the oil price tick up.
Crude oil futures rose on Monday following the stock indexes. Thus, considerable strengthening of the American stock indexes eased concerns for a while regarding growing oil and fuel reserves.
According to the trading results of the New York Commodity Exchange, the November sweet crude oil futures ticked up by 82 cents or by 1,2% to 66,84 dollars per barrel. Brent oil futures price jumped by 43 cents or by 0,7% to 65,54 dollars per barrel.
The oil prices climbed when the US stock indexes started the trade in a positive territory, recovering the interrelation, which has been unstable for about a couple of weeks.
The oil futures has been fluctuating around 70 dollars/brl for several months already, while the traders are waiting for the global economy to use surplus oil and fuel inventories accumulated during the downturn. The reserves contraction is slower than it was expected. This promtes corrections from time to time, similar to that was seen in the last week when the oil price fell by 8% amid unexpected growth of crude oil inventories in the USA.
The oil market participants also keep watch over the actions of Iran waiting for «G6» negotiations which are due on Thursday in Geneva. On Monday, Iran tested the long-range rocket able to reach Israel. The USA and its confederates stand for new sanctions introduction after the information emerged last week concerning the establishment of the second uranium enrichment plant in Iran, raising concerns about that Teheran is to develop the nuclear weapon.
FRAMINGHAM, Mass. -- Energy Insights, an IDC company, announced today that it now offers research coverage dedicated to helping utilities and technology providers understand the complex dynamics of the rapidly evolving intelligent grid market. The Intelligent Grid Strategies research and advisory service will explore the business and regulatory impacts of emerging intelligent grid technologies and provide innovative strategies such as distributed energy resources. Technologies covered will include sensors, smart metering, network automation and control, analytics, and communications
Kuwait's finance minister said on Thursday the US dollar will remain the currency of oil trading because there was no problem in using the US currency.
The remarks follow a host of denials this week of a British newspaper report that Gulf Arab states were in secret talks with Russia, China, Japan and France to replace the dollar with a basket of currencies in trading oil.
"This is not on the cards," said Mustapha Al Shamali on a visit to London, when he was asked if there was a chance of replacing the dollar.
If we carefully look at the present business scenario then we could easily see that in recent time futures trading are gaining its world-wide popularity. In fact it is the most common trading found on many markets these days. As per the latest definitions- it is more like a trading of contracts called futures contracts, which facilitates the owner with power to trade the basic commodity at somewhere in the future for a fixed rate. Moreover, like stocks and options trading, futures trades are done in precise centralized futures commodity trading markets. However, depending upon the type of futures contracts, it can be broadly classified as commodity futures contracts and financial futures contracts.
In commodity futures contracts, trading of contracts end with a physical delivery. They may include agricultural commodity futures like sugar, oats, wheat, rice etc OR energy commodity futures such as crude oil, natural gas, etc; metals & stones like gold, silver, diamond etc. This means that if a trader is holding a futures contract and the time come when it expires, the appropriate payment will be made by the buyer, and the basic commodity (agricultural or energy) will be delivered by the seller. Whereas in financial futures contracts, trading of contracts end with a cash settlement and it include futures for treasury notes, bonds, mutual funds etc.
The futures contract trading can be executed electronically on electronic trading platforms linked to the major commodity exchanges or by the traditional open outcry method on the floor of the exchange. However, the basic form of futures contract is that it must state a location and date for physical delivery of the particular commodity. There are times when delivery arrangements are also specified by the exchange. This is particularly important for commodities that require high transportation costs, which in turn may affect the delivery place.
All those who are involved in commodity future trading must understand that for most commodity futures contracts, daily price movement limits are specified by the exchange. A limit movement is nothing but a move of price that can shift in either direction equal to the daily price limit. If the price moves down by an amount equal to the daily price limit, the contract is said to be limit down. And if the price moves up by the limit then it is said to be limit up. Price limits and positions limits generally aim to avoid large price movements deriving from excessive speculation. However, at times they act as an artificial barrier to trading when the price of the underlying commodity increases or decreases swiftly.
Overall, trading with commodity futures is definitely a good way to make handsome money but there are some essential factors that one has to take care. It is highly volatile in nature and more likely to remain unpredictable mainly because of several factors like geopolitical concerns, contracted demand-supply fundamentals, growth and inflation pressures that put pressure on the global commodity market. It is a most interesting market environment but also a dangerous one as many wars have been fought and many nations & leading companies compete for scarce natural resources and food supplies.
It is available in 1/10, 1/4, 1/2 and 1 ounces of gold, carrying denominations of $5, $10, $25 and $50, respectively. It is specified by law that the American Eagle Gold Coin must be produced by gold from sources exclusively found here in the United States.
In addition to being produced with an alloy of silver and copper in order to create a more wear-resistant composition, each coin contains 91.67% of gold (22 karat), 3% silver and 5.33% copper, no matter what the denomination may be.
The American Eagle Gold Coin features breathtaking artistry depicted on both sides. On the obverse side, there is Lady Liberty, full length, with flowing hair and holding a touch in her right hand and olive branch in her left. This is a depiction of the past designs of Lady Liberty created by Augustus Saint Gaudens, famous sculptor and friend of former President Theodore Roosevelt. Additionally, the Capitol building is featured in the background, off to the left. The opposing side has a male eagle with an olive branch in his beak, soaring above a female eagle and her hatchlings in a nest.
Gold Eagles provide an added value for your investment dollar in that they may also be utilized as government approved IRA (Individual Retirement Accounts) investments. As the U.S. government also provides the guarantee of each coins weight and precious metal content, American Gold Eagles provide a relatively safe and stable long-term investment strategy to a diversified portfolio of IRA assets.
The assets that are included in a tax-sheltered IRA plan do need to be held in trust by an authorized Trustee or Custodian, a third-party who would be authorized to accept these contributions in a secure, authorized depository such as an FDIC insured bank vault. Not all Custodians or Trustees are approved or authorized to store gold bullions coins,as outlined under government regulations, so you it is important to take care in choosing a responsible organization to hold your assets if you do wish to include physical gold coins in your IRA investment strategy.
The majority of American Eagle Gold Coins are produced from the West Point Mint in New York and therefore bear the mint's "W" marking. With the current state of the American economy, the price of gold has become more valuable than ever before. Due to this fact, while the coins have nominal face values of $5, $10, $25 and $50, these coins are currently selling for a great deal more. At this time, the American Gold Eagle Coin are sold for approximately $130, $275, $500 and $1,000 respectively, as gold prices continue to drive the prices even higher.
As the growth of traditional stocks and bonds has slowed considerably the past few years, investors have turned to gold bullion as a reliable source of portfolio diversification and hedge against a weakened dollar. Typically speaking, the price of gold flows in a direction that is opposite that of dollar values. Simply put, gold prices trend upwards as the dollar falls.
less than 3% of the world's oil consumption is traded in futures at the New York Mercantile Exchange (NYMEX). This is an alarming small percentage, considering the enormous impact these futures have on the world economy. Not only do they provide direction for stock markets, they also affect millions of consumers every day at the gas station, and influence the price of every airline ticket sold.
Do we want a market with such a huge responsibility to the world economy be determined by only a few players? At the moment the market is so small, that it takes only one big financial institution to determine the direction of oil prices. During the summer of 2008 the energy trading company Vitol controlled almost 11% of the futures traded. Imagine the price action when this company decides to sell off its positions, shaking up markets all around the world. A simple calculation shows us that using the leverage offered at the futures market will enable you to control the entire oil futures market with only $4 billion in cash. That's a very cheap price for practically buying the world economy.
The US government believes that it is the oil speculators who let oil prices soar to around $145 a barrel in 2008. The funny thing is that in reality most of the price hike is accounted for by the companies who dislike it the most, the airline companies. Hedging is a common strategy to manage risk by limiting the influence of fluctuating prices on business profitability. By taking long positions, the airlines make sure that an increased cost for kerosene is compensated by a profit on their positions. However, their increasing demand for long positions leads to rising prices, creating opportunities for speculators to gain a profit.
A good example of the reason why there should be more oil speculators happened on June 30, 2009 at the ICE Futures Exchange Europe. This little brother of the NYMEX experienced a sudden price hike of almost $2 a barrel because of rogue trading by London oil broker PVM Oil Futures. This unauthorized trading cost the broker around $10 million, and painfully shows that with a limited amount of money the market can be influenced significantly. Imagine what happens if the really big financial institutions want to move the price a bit.
What if the US government decides to regulate the oil futures market and close trading for speculators? Not only will the market loose its natural price mechanism, it will also become a play ball for the boys who profit the most from rising oil prices: the oil companies. It will make it even easier for them to control the market and artificially drive prices up. They can afford it to take huge risks because they will always hold the Joker card. Whenever their long positions are threatened by declining oil prices, they have the possibility to cut supply, therefore driving prices up, until their positions are covered again. Is that what we want?
What the market needs is an increased participation by individual speculators who do not have any physical ties to the oil market itself. These are the people that are trading for only one reason: profit. They do not benefit from higher or lower oil prices in any other way than the positions they own. Traders are trading facts, therefore contributing to the natural price mechanism. When demand surpasses supply, prices will increase, if not, the other way around. They do not posses the opportunity to influence prices in an artificial way. When their trading volumes become the bigger part of the market, the true oil price is on its way.
There are also many websites that are full of baloney to say the least, and want nothing more than to take your money and run. Then there is the popular Forex trading market. This is one of those businesses where the vendors are making fortunes while the people trading are losing more and more money by the day. The goal is to actually make money by trading, right?
That is why future oil trading is one of the best investment opportunities around for any major investor or small-time individual. You can trade oil from anywhere in the whole world with a free price feed starting with just $300 capital or more.
The best thing about the oil trading business, is that there are easy to follow, exact rules with no repainting and if you follow them you can double your money (or even more) every single month when the trading conditions are good. There is only one thing to trade, so it is a lot less complicated than other markets.
With oil trading, you can profit from falling prices, just as equally as you can from rising prices. There are stop loss mechanisms (like with Forex) that allow you to cap your losses and never lose more money than you are willing to risk or can afford.
There are so many benefits to trading oil that it would be hard to cover them all here. Take it from a seasoned investor... trading oil is the way to go.
As automobiles and certain types of technology become more prevalent, the demand for oil has been going up amongst consumers. And as you may expect, when demand goes up, so does price, and in this case it causes the price of oil to rise.
Deep discount brokerages and online futures brokerages have made trading oil something that is easily accessible to almost anyone with an internet connection. The two most common ways to trade oil are with oil futures and oil ETFs, which will be explained here.
Futures trade basically the same as stocks, but the main difference is that every few months they expire and a new contract takes its place. For the most part, it's not really a big deal. The reason for this is because long in the past, a futures contract was actually the right to buy oil (or whatever commodity the futures contract was for), but today it's not really that literal; no one who trades futures actually expects to have barrels of oil delivered to their front door when the contract expires. In fact, nearly every futures broker will automatically "roll over" or sell a contract for you when it expires. Other than that different, the general premise of futures is the same as stocks: the goal is to buy and sell for profit.
There is also a stock ETF (Exchange Traded Fund) for oil prices that can be traded, bought, and sold just like any other stock. Its ticker symbol is USO. You can buy this through any stock brokerage and sell it whenever you want. Since it's a stock, there is no expiration or rollover like there is with futures.
If you study your economic news and pay attention to what's going on in the world, you may very well profit from trading oil prices.
Much has changed in the international gas market since the first edition of Gas Trading Manual was published in 2001. As expected progress has continued towards greater market liberalisation. European gas and electricity markets are gradually being opened up to competition and EU energy ministers have finally agreed to speed up the process, setting a new target date of July 2007 by which time all consumers must be able to choose their gas supplier. At the same time mergers and acquisitions have changed the corporate landscape creating big new multinational utility companies with new priorities. Confidence in the role of trading has been hit by corporate failures such as the collapse of Enron which has forced many companies to re-evaluate the role of trading in their businesses. Nevertheless trading is here to stay and the opening up of the European gas and electricity markets continues to foster the development of new market structures wherever they are needed.
The new edition of GTM takes all these changes into account whilst presenting the single most complete source of information currently available on the international gas markets. GTM is the leading information source on this complex industry and this new edition is set to further enhance its reputation.
The manual is divided into four complementary parts
Part 1: Introduction to gas trading. Covers the changing nature of the gas business, fundamentals of the market, supply and production, the different markets for gas and introduces the main trading instruments, including weather derivatives.
Part 2: European gas market. Examines the key role of the EU Gas Directive in changing the structure of the European gas market. Focuses on the prospects for competition in Continental Europe and the UK traded gas and goes on to deal in detail with the international petroleum exchange (IPE) natural gas futures contract, the standard OTC agreement, the On-the-day Commodity Market (OCM), the Network Code, and take-or-pay contracts and gas pricing.
Part 3: Administration. Deals with the essential 'back-room' aspects of gas trading operations, including internal control frameworks, accounting for derivative instruments and the taxation of gas trading.
Part 4: Gas and Electricity. Covers the important area of the role of gas in power generation and the convergence of the gas and electricity markets.
GTM is the only publication to provide a comprehensive, regularly-updated reference source on the structure and conduct of the international gas markets. The manual covers all the major gas trading instruments and their applications, the trading centres, contracts, uses and users, and the administrative, management, tax and accounting implications of participating in them.
Compiled from the contributions of leading industry professionals, it is an indispensable practical companion for all those involved in the trading of gas.
haracteristics An introduction to oil and oil trading, and includes material on the nature of oil as a commodity, refinery processes and the different ways in which oil is priced.
Instruments and markets Deals with the oil market itself taking each segment in turn, explaining how the various trading instruments work and describing the markets that have evolved to trade them. It starts with the physical oil markets, moving on to forward and futures markets, followed by options and swaps.
Administration Covers the essential 'back-room' activities without which oil trading could not continue. It includes practical material on operations and logistics, credit control, accounting, taxation, contracts and regulation, and controlling financial risk, providing a unique guide to the subject.
Compiled from the contributions of a range of internationally respected professionals, it is the indispensable practical companion for all those involved with trading in this complex commodity.
Trading in oil futures and options is an introduction to price risk management in the worldwide oil industry. With numerous practical examples, it requires no prior knowledge and should be read by everyone involved in the industry.
Although aimed primarily at those new to risk management it will also provide a useful theoretical background to more experienced managers and it will show those in other markets how the oil industry uses futures and other derivatives.
This book concentrates on all the risk management tools available to everyone from crude oil producer to refined product consumer and explains the theory of futures, exchange options and over the counter trading.
Market value is set by investor behaviour ....but objective methods of valuation are vital for accurate predictions of market behaviour. What are the key issues facing the industry - and the main points the analyst needs to look for when interpreting oil industry accounts? Do the best prospects necessarily lie with the larger and better-financed companies? How best can an investment strategy be managed in the refining industry, with its conflicting pressures of environmental controls and inadequate returns?
This unique and authoritative book has the answers to these and many other questions, offering a series of benchmarks and performance indicators with which to evaluate oil company shares. An updated edition of a respected and established title, it remains the only comprehensive handbook of its kind available, and will be eagerly welcomed by corporate planners as well as investors and analysts.
Crude futures have recovered from intraday lows inflicted by worse than expected U.S. employment data. Rising unemployment and declining consumption should take its toll on demand for crude. Additionally weekly inventories registered a sizable surplus for the second week in a row. Despite the negative supply and demand fundamentals crude continues to prove resilient. In fact, yesterday crude showed a muted reaction to negative data compared to the large pullback in U.S. equities. Today crude is being buoyed by the positive performance of the EUR/USD in the face of another weak session in U.S. equities. Therefore, crude futures continue to carve their own path in the midst of volatile performances of both the Dollar and U.S. equities. The stability of crude is mysterious and we can only speculate as to the reasons behind recent resilience. Tension surrounding Iran’s nuclear program could be buoying the price of crude. However, Iran made concessions and appears to be playing ball, so this line of reasoning doesn’t carry much weight. Another possibility is that the regulation curbing trading of commodity futures could be lowering volatility. Lastly, investors may be reluctant to send crude out of its trading range due to the fear that OPEC will manipulate production to keep crude within its desired $68-$73/bbl trading range. We believe the last reason may be the more prominent driving force behind crude’s resilience, yet we are merely speculating.
Regardless of the reasoning, crude has climbed back above our 2nd tier uptrend line and is trading back around the psychological $70/bbl level. Crude futures registered large buy-side volume on Wednesday’s up-bar, indicating investors are standing behind crude’s recent step higher. However, the futures are still stuck beneath our 3rd tier downtrend line and multiple September highs, not to mention the psychological $75/bbl level. Therefore, gains should be limited to the topside as long as these technical barriers are in place. As for the downside, crude futures above our 1st and 2nd tier uptrend lines along with previous September lows and the psychological $65/bbl level. Due to the wedge taking place and the inconsistency of crude’s behavior with its correlations, we have a neutral outlook trend-wise on crude. Crude’s fate will ultimately rest on the S&P’s ability to bottom and the Dollar’s behavior over the near-term. Any wave of massive Dollar appreciation coupled with an exacerbated downturn in U.S. equities would likely drag crude futures lower, and vice versa. Since we are presently negative on the EUR/USD, GBP/USD, and S&P trend-wise, we are tempted to have a negative outlook on crude. However, we will stay in neutral as long as crude bounces around in its present wedge.
Price: $69.91/bbl
Resistances: $70.01/bbl, $70.36/bbl, $70.73/bbl, $71.13/bbl, $71.38/bbl, $71.78/bbl
Supports: $69.34/bbl, $68.97/bbl, $68.48/bbl, $68.08/bbl, $67.53/bbl
Psychological: $70//bbl, $65/bbl, $75/bbl
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