Expected Crude Oil Investments And Natural Gas Prices Explained By PEMEX CEO

Oil Investments with PEMEX

Today I was reading about the Stock Market and its wild swings. It seems that there is so much uncertainty in this world and in the markets these days, yet commodities such as food and energy remain relatively stable.  Interested in these trends, I focused on up and coming energy companies that are showing good-to-great potential, and found PEMEX to be a good contender for oil investment.  PEMEX is a Mexico-based company which makes most of its investments in the oil sector. With a strong level of oil production at two million barrels of crude oil a day and five and a half billion cubic feet of natural gas.   In an interview with Steve Hargreaves of CNN Money on August 8, 2011, PEMEX’s chief executive officer, Juan Jose Saurez Coppel, explains that his company sells roughly 80% of their product to the United States of America. He also goes on to comment on the future value of crude oil in today’s seemingly-insane market place.  Coppel believes investments in crude will stay in the range of $80-$200/barrel, depending on several factors such as: the global recession (the $80 per barrel scenario) or extreme political difficulties that would interfere with supply levels (which could bring the price to $200/barrel).

I was very surprised that PEMEX’s CEO would jeopardize their investments by publicly discussing topics such as illegal tapping of pipelines, instead of focusing on the markets.  He went in-depth into the process of how to weld a mechanical device directly onto the surface of a pipeline. Once this device is welded on, it seems like there is a cork screw-like tool that pokes a pinhole into the pipe.  If one could tap a line and only get less than 1% of the product, it could be worth a fortune on the black market.  I was amazed that one pinhole in the pipeline could fill a large tanker trunk within minutes. One would think that people would use the oil for themselves, but it is organized crime that is threatening the company and the communities around the pipelines.  This is just one problem with the oil and gas industry and those that make investments in them.  For example, a small tap in a pipeline just like PEMEX’s has in the past caused a massive oil spill and explosion, which killed many people in a small town.  It is widely believed that if one were going to make an investment, they should consider the commodities sector, where these market fluctuations have had less influence.

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