2012 Outlook for Crude Oil Investment
Crude oil has pulled off a small but rather impressive revival in the past month after hitting low in August. The oil commodity has taken a lead over several other principal assets and has been able to maintain that lead over the course of September and the month’s dizzying fluctuations. Despite weakening dollar standings, crude oil investments continued their slow increase, never even coming close to dipping below the $80 a barrel mark it hit in August. September has seen the product performing far better than most other equities in the running.
These numbers don’t run parallel to what the fundamental dictate. In theory, far too many established factors are playing against crude oil prices over the next few months.
Crude oil production in Libya is expected to resume operations in the near future. This should prove to be more than helpful to OPEC and its supply worries which have pushed speculators to raise the commodity prices to over $110 per barrel.
There is an expectation of an increase in OPEC crude oil exports over the course of next year, after a considerable lag in exports this year. The International Energy Agency has issued a statement saying that though the current dip in OPEC exporting now stands at 360,000 barrels a day, next year’s figures promise a rise of 510,000 barrels daily.
Despite a predicted drop in Russian production, an increase of 220,000 barrels a day is forecast for nations not in OPEC.
China’s demand for crude oil is predicted to take a dip, which will have immediate global effects on the rest of the oil market, while U.S. inventory for the commodity is expected to remain largely unchanged.
The five largest oil companies in the world, BP, ConocoPhilips, Shell, Exxon Mobil and Chevron are all expected to underperform in these trying times for crude oil demand. Some potential investors might find a safer haven in investing in exploration firms. With increased production prediction for non-OPEC regions, companies like Halliburton might see themselves on a growth upswing.
However, on the whole, despite beating the odds, crude oil investments simply do not seem like the safest bets at the moment. Even if the second recession is kept at bay over the course of the coming