Category: Crude Oil

Brazil is a huge country with plenty to offer in the fields of commodities, commerce, and vacations, no matter a persons individual preferences. In fact, there are so many things to do in Brazil, many tourists will return for a second or third visit and businessmen want to camp out there.

Brazil is to commodities what China is to manufactured goods. A large share of the world’s beef, orange juice, soybeans and iron ore comes from the great green giant. With the recent discovery of two huge oil fields off the coast of Brazil, the most important oil field finds in the world in decades, Brazil is set to advance fast in an energy short world. The Brazilian oil firm, Petrobras, is an expert in developing deep water fields as these fields are.

While the deep water development costs will be tremendous at current prices for crude oil Brazil will reap huge financial benefits as the fields start producing oil, probably by 2015. The United States will be eagerly seeking to import oil from Brazil as the Canteral major field of the number two exporter of oil to the US, Mexico, is already in a serious state of decline. The US will soon need to find a replacement for oil it is now importing from Mexico.

Crude oil surges towards $100 a barrel, rallying nearly 3% to a new all-time high Tuesday, joining a broad based commodities rally, boosted by expectations for a drop in crude inventories and continued weakness in the dollar.

Crude for December delivery rallied $2.72 at $96.70 a barrel on the New York Mercantile Exchange. Earlier, crude posted a new record high of $97.

“What a rally,” said Phil Flynn, an analyst at Alaron Trading. “What a difference a day makes. This volatility is enough to give you vertigo.”

A day earlier, Monday, crude oil fell $1.95, or 2%, to close at $93.98 a barrel.

“What’s driving us today is a rebound in the stock market and more weakness in the dollar. It seems that this market is so focused on the outlook of the economy and it’s using the stock market as a gauge for that,” Flynn said.

“Tomorrow, we get the inventory numbers. We’re looking for a draw in supplies and that’s adding support,” Flynn said.

“Crude oil has shown remarkable resiliency, as price corrections continue to be shallow and short-lived,” said John Kilduff, an analyst at MF Global. “Doubtless, even though the market retains the technical capacity to stage a more extensive price correction, participants are probably very reluctant to press the short side of this market ahead of this week’s inventory reports.”

“Expectations are for a considerable decline in crude stocks, largely due to recent disruptions in Mexico’s oil shipments,” Kilduff said.

The crude oil market bull has been relentless on it’s run for $100 a barrel crude oil.

With crude oil well over $90 a barrel, closing at $91.86 on Friday, oil market analysis agree that it is no longer if crude oil will top $100 a barrel, but when.

Experts also believe that there’s a good chance drivers will see $3 gasoline in the US before the end of the year. “Three dollar gasoline in this market is unavoidable,” said Stephen Schork, publisher of the industry newsletter the Schork Report. “At this rate, we’re going to see $4 a gallon.”

Europeans must be envious of what to them are cheap gasoline prices in the US, even at $4.00 a gallon. Gasoline is already over $6.00 a gallon in most European countries and can go as high as nearly $9.00 a gallon. Of course, as gasoline prices increase in America they will be increasing in Europe as well.

The oil bull market is driven not only by speculative fever but by a growing imbalance of supply and demand as peak oil supply conditions kick in while demand is soaring in a world full of geopolitical tensions. For example, the recent increase in sanctions imposed upon Iran by the US and the tough talk from the US that goes with it and the possibility of the Turks invading Northern Iraq to strike at PKK forces there has been supportive of higher crude oil prices.