Mexico’s Cantarell oil field, located in the shallow waters of the Bay of Campeche, is by far the largest conventional oilfield discovered in the Americas and the sixth-largest worldwide. It’s estimated that Cantarell contains some 35 billion barrels of oil and can ultimately yield 17.5 billion recoverable barrels. But, like so many other supergiant oilfields around the world, Cantarell is slowly dying.
The past two months have been tough for all investors, particularly those with exposure to the energy and commodity sectors. But we’ve seen this sort of correction before, and I’m quite certain we’ll see more in the future; no great bull market proceeds in a straight line higher. The good news is that the longer-term bullish factors driving these markets remain intact.
The father of modern economics, John Maynard Keynes, was once asked in a debate how he justified changing his mind on certain key issues of his day. Keynes replied “When the facts change, I change my mind. What do you do, sir?”
The US is the world’s largest oil consumer, burning roughly a quarter of total global supply.
Expedition officials compared the act to Neil Armstrong’s planting of the American flag on the moon, and the US Geological Survey determined, to a degree that should satisfy United Nations Convention on the Land of the Sea requirements (should the US eventually ratify it), that there’s not much ground for resource disputes in the area.
Predicting the price of oil next week, next month or next year is about as Quixotic a venture as can be undertaken by even the most diligent expert. And engaging in such forecasts is even more counterproductive for individual investors focused on the long term; you don’t enjoy the romance of headline-grabbing statements or electric cable TV shout-fest appearances, and, most important, it’s an impractical exercise.
If there’s one factor that’s catalyzed the recent selloff in crude oil prices, it’s declining oil consumption from developed-market economies.
We’ve had a choppy week on Wall Street as traders continue to seek some direction from both positive and negative news. All three of the major indexes are relatively flat this week. The Dow Jones Industrial Average sank 0.4 percent, the Nasdaq Composite ended the week flat and the S&P 500 tacked on 0.2 percent.
The raw numbers are impressive: A report by the US Geological Survey (USGS) found that 25 areas inside the Arctic Circle contain about a fifth of the world’s undiscovered but recoverable oil and natural gas reserves.
We had a nice midweek rally when financials Bank of America and Wachovia reported that their second quarter performance wasn’t as bad as expected. That helped push those banks up 10 percent and almost 14 percent for the week, respectively, and generated additional buying interest in other players.
