Oil Improves as US Consumer demand Improves

August 30^th, 2011: Oil prices rose to $87 a barrel in Asia as oil demands in the US improved. Benchmark oil for October delivery witnessed a hike by 22 cents reaching to $87.49 in the electronic trading of the New York Mercantile Exchange. Crude oil settled at a considerable high of $87.27 on Monday 29^th August.

Brent Crude in London for October delivery was also high at $112.30 on the ICE Futures exchange. Three weeks back crude was at $76, 16 percent lower than what it is today. This low price was owing to a widespread apprehension that the EU and the US economies might slip into a period of recession.

He month of July according to Commerce Department, witnessed a sharp rise in consumer spending which accounts to nearly 70% of the economic activity of a nation and this is perhaps the biggest in the last 5 months. Global stock markets too saw increase in spending. For instance the Dow Jones industrial average rose by 2.2 percent, and there were overall gains in most of the Asian stock markets.

With growing economic demands for oil crude oil is expected to head for a low, as apprehended by a few analysts. In Nymex trading, heating oil rose to 0.8 cents and reached to $3.03 a gallon, while gasoline gained 0.6 cents a gallon.

Also in conclusion to the final draft of a major deal between oil giants, most of the big energy companies of the world will have to surrender gas from Iraq’s southern oil fields, to a project led by Shell.

Overall a better week after about three weeks that were full of speculations and worries, with floods in the US and political instability prevailing in Iraq, oil prices last week were dismal, but a sunny morning seems not far.

Increase in oil price

Oil prices rose on Wednesday 24^th August 2011. Benchmark West Texas crude rose 75 cents to $86.19 per barrel in New York, while Brent crude was up $1.34 at $110.65 per barrel in London.

The Government reported that orders for long lasting, durable goods like autos and aircraft increased 4% in July, the biggest increase since March this report increased the price. Another reason for increase in a price is the nation’s oil supplies dropped by 2.2 millions barrel by last week.

SEB Commodity Research said that, oil prices could drop temporarily if the crisis in the oil-rich North African nation eases or if strongman Muammar Gadaffi is caught. “Markets have really held back their gains today”. Price initially shot higher on Wednesday after the release of data showing US durable goods orders. Oil and gas companies have successfully diversified their upstream business line. According to Edinburgh based Wood Mackenzie released on Monday, unconventional oil and gas, liquefied natural gas, and deep water oil and gas now make up about 50% of the future value of the international energy  giants, which is a Whopping $3.2 trillion.

As oil price is falling in New York the price pf dollar is increasing and the gold plunged the most in more than three years. Goldman Sachs analyst believe that the oil prices will rise in the next year, they told that the risk of US recession has risen, but their revised US economic outlook remain consistent  with a recovery at a slower pace, “which is typical following a housing bust.”

After seeing oil prices, investors must grapple with political protests in the world’s top oil exporter, Saudi Arabia, and the impact of the biggest earthquake on record to strike Japan. In coming week, crude market will be looking for clearer information on the condition of the Libyan oil and gas infrastructure says Sanjeev Gupta.

Oil Markets react as battle rages in Libya

August 23^rd, 2011: Libyan rebels have overthrown successfully Moammar Gadhafi, a long time dictator; sparking analyst remarks immediately, that say the oil will trickle back in the market in few more months. But to return back substantially might take few years.

This event pushed benchmark oil up for upcoming October delivery by $1.34%, reaching $85.76 in the New York Mercantile Exchange’s electronic trading. London witnessed a 29 cents increase in Brent Crude thus reaching to $108.65 on ICE futures exchange.

The oil infrastructure in Libya is massively damaged leading to a sharp fall in crude output from 1.5 billion barrels a day to 60,000 barrels. A recent report by Goldman Sachs apprehends Libya’s oil production to average to 250,000 barrels a day by the coming year.

If the production of crude increases in Libya, analysts expect Brent to drop back below $100 and reach $85 by the year 2012. However with Brent crude prices plummeting further it is rather unlikely that there would be markets flooded with oil.

In Nymex trading for October contracts, heating oil rose by 2 cents and climbed to $2.93 per gallon whereas gasoline futures were at $2.71 per gallon. Brent is more affected by the Libyan crisis as compared to the WTI. The West Texas Intermediate, light sweet crude increased by $ 1.29 cents for October delivery.

Thus a Manoucher takin, a senior petroleum analyst at the Center for Global Energy Studies in London says, the return of Libyan oil production will in fact be a gradual process.

Crude oil falls

Crude oil prices plunged from a recent two day high in New York, apprehending a drop in oil demands due to the weakening of the US economy. The US presently is the highest consumer of oil. Falling crude oil also took along with it the future markets by about .6%. 

This has furthered the growing concerns about the improper health of the economies of the US and the European countries. There are modest developments expected in the same until the end of this year. Moreover Crude oil is being apprehended to fluctuate within a range of $80 to $100 in this span of time. 

This faltering in the crude oil trade and the subsequent fall in the equities markets, particularly of Asian markets, is a sign of a momentary turbulence though. The economies of US as well as of European countries have been striving hard to control such fluctuations and the speculations associated with it. The market seemingly however has two choices to fall or to rise, and a few days fall will definitely better the situation on the third day. 

Crude oil’s delivery for this September has dropped by 56 cents to $87.02 per barrel in the New York’s Mercantile Exchange’s electronic trading.

Further US crude oil inventories have witnessed a rise to 354 million in the week that ended on August 12^th as per the reports prepared by the Energy Department.  The nation’s Strategic Petroleum Reserve is letting out huge stocks in close coordination with the Paris based International Energy Agency. 

An overall failure of crude oil to breach chart resistance is a clear implication of prices to decline further.

Making Gold out of Liquid Mud

There cannot be a more invaluable natural resource than Crude Oil. Crude oil and its products have been governing the day to day life of most developed countries’ residents. Yet there is a rising concern over increase in demands and a parallel rise in oil prices, with supply and exports shrinking at a rapid rate. The call of the hour thus deviates completely from monitoring prices and increasing production. Tapping newer resources and improving methods of oil production are the need of the hour.

In the midst of brewing battles, where US president takes the lead to urge elimination of oil subsidies, and the oil prices touching newer heights, there is but one Company making the most of time. Ventrum Energy has ramped up its team of expert professionals and is on a mission to explore new oil fields and tap new venues of mining oil. It has started new projects in Wyoming and has shaken hands with yet another name to reckon with in the field of Oil mining and Production. Fossil Energy with its head operations located in Delaware is a super power in the field of oil mining and developing.

Ventrum Energy has left not a single stone unturned to meet the increasing oil demands at home and to curb dependency on foreign oil. Most developing countries have started using oil and oil based products more than ever imagined, resultantly; there is a trade deficit in crude oil in US. The company has taken upon itself the onus of tapping untouched fields of oil within US and is inviting partners to own their own oil companies, by assisting them with its time tested expertise and knowledge.

With such efforts raising over the bleak horizon the future of the highly talked about oil and its products seems to be gathering a new momentum. Ventrum energy is making Gold out of Liquid Mud.

Visit www.ventrumenergy.com for more details about the company.