With the ban of the European Union on Iranian oil imports, the crude oil price chart can reach up to $150 per barrel. According to the official the ministry has to get ready for that possibility. He further adds that the ministry needs to look at the present measures and make new proposals.

Cheng Ming-hui, Vice President of the CPC, said that the present approach of letting the CPC carry fifty percent of whatever increases there are in crude oil prices in excess of $100 a barrel and charging the other 50% to gasoline consumers had already inflicted revenue reductions of NT$28.5 billion during the previous year.

The measure which became effective starting Dec 6, 2010 was the government’s way to maintain stable consumer costs as crude oil prices increased to more than $100 a barrel.

According to Chen, a loss of NT$38.7 billion that was posted by CPC in 2011 charged about NT$3.7 lower in the per liter cost of diesel and gasoline as of the 29th of January compared to its prices if it was dictated by market forces.

For each NT$0.1 a liter that the company carries instead of passing to the consumers, CPC is bound to lose an extra NT$1.2 billion annually, said Chen.

According to the economics official, to stop the losses of the CPC, the ministry has to conduct a careful analysis of the present measure and may possibly let gasoline prices increase to reflect the recent crude oil price history. He further adds that going back to a market-based price mechanism will be the standard and the ministry expects that CPC does not need to lose money in the long run which is beneficial for the country.

10 respondents participated in the survey and exactly 50% of them hopes for an increase in oil prices soon while one of the ten respondents predicts a reduction. The remaining four expect oil prices to stay stuck within a certain range.

The pledge of the Federal Reserve that keeps rates of interest at a low level of 0 to 0.25% up to the latter parts of 2014 strengthened the risk appetite in most commodities in the market and helped push a gain of $1.10 per barrel in the recent crude futures of the United States.

In the Mercantile Exchange of New York, crude futures for March delivery stayed at $99.56 per barrel. In London’s ICE Futures Europe exchange, March settlement’s Brent crude oil gained 1.5% in the past week or $1.60 to reach an oil price per barrel of $111.46.

Tensions from Iran escalated as sanctions from the West supported weekly prices despite Tehran’s continuous threats to block the Strait of Hormuz, the strategic route of 20% of the world’s oil supply.

Tom Weber, PFG Best’s Managing Director, has a neutral to bearish outlook on oil at present and keeps his tactic of shorting any beneficial rally. But, Shelley Goldberg, Roubini Global Economics’ Director for Global Resources and Commodities Strategy cautioned that a shock to the supply of oil will have damaging effects to the global economy and result to a terrible recession or depression.

She added that the crude oil price chart will be correlated to other high-risk asset classes, while having a short stand in crude has been a highly risky proposition. From a worldwide political point of view, Goldberg said that the present year will mark a separation of ties between countries and weakening global partnerships.

According to a recently published C1 Energy report, Brent, Cinta and Dubai’s latest weighted moving mean price was 4.1% higher than its October 7 level when China made its latest adjustments to oil prices

China is improving its current crude scheme so that it can better show refining prices with possible plans of shortening the period of adjustment from the present 22 working days. Moreover, it is also for the purpose of changing the component of the crude basket in which fuel prices are associated.

The government may launch the recent scheme within the first semester of this year after it missed its previous timeline that was expected by the industry at the end of 2011.

But, the estimate of the C1 may be a little varied to the calculations of the NDRC or the National Development and Reform Commission that establishes oil prices for the top 2 biggest consuming nation worldwide.

The NDRC may opt to withhold increases in gasoline prices which are almost close to a record breaking high.

According to Sinopec Corp’s marketing official, the government may not possibly increase current crude oil prices before February 6 which is the end of the New Year festivities.

The NDRC has yet to decide on what particular kind of crude oil to classify since the pricing formula was introduced in the beginning of 2009.

The NDRC said that the government is thinking of changing oil prices if the moving average for 22 days increases or decreases by 4 percent on top of other factors like inflation, demand and fuel supply.

China reduced oil prices for diesel and gasoline by around 3% last October 9.

There has been a recent jump of 4 cents in San Antonio’s average gas price to reach $3.33 per gallon for regular unleaded gasoline. At present, San Antonio motorists are already spending 42 cents more for gasoline compared to last year, said the AAA.

Almost everyone loves to blame companies for the price hike. However, there are several other reasons like higher crude oil prices and shutting down of refineries why gasoline prices continue to grow. Aside from these, positivity of a stronger economy that results to higher demand also plays a factor in the rising cost at the pump. Moreover, tensions in the Middle East also plays a part in the presently high gas prices.

According to Director Bruce Bullock of Southern Methodist University’s Maguire Energy Institute at Cox School of Business  crude oil prices during this period of the year is at a record high that is why gas prices are also at the same level in the major parts of the United States. He said that come springtime, gas prices may possibly reach a high range of $3 in Texas.

Many are shocked by the recent jump in gasoline prices. However, Tom Kloza, Oil Price Information Service’s chief analyst, said that the current increase is minimal relative to what is expected in the coming months. He said that gasoline costs are expected to shoot up due to higher crude oil prices that are partly caused by closures in refineries and minimal recovery in oil demand during the spring months of March, April and May. Although he does not believe other analysts forecasting that gas prices may reach at least $4.6 per gallon, he thinks that it may possibly reach $4 per gallon.

For San Antonio, the average gas price history remained lower compared to the entire country. The maximum amount that they have ever paid for gasoline was in July 16, 2008 when the price per gallon of gasoline increased to $3.96.

The market was also recently rattled with threats of strikes that can possibly close several refineries. As an example, the Valero Energy Corp of San Antonio expressed its plan to shut down its plant in Memphis, Tennessee in case a strike occurs.

During the fall and winter season of last year, two East Coast refineries closed down together with a main plant in the Virgin Islands and several small ones in Europe. All these aroused fears that supplies of gas may be affected.

Traders and speculators have also joined the bandwagon and bid up oil futures. Aside from this, the current crude oil price rose by 3% in the past month. Costs of gasoline have always been dictated by the benchmark Brent crude prices. Recently Brent per barrel crude price during trading was about $111. It reached a historic high of $145.91 in July of 2008.

For as long as Brent increases, gasoline will always follow, said Brian Youngberg, Edward Jones’ senior energy analyst.

The point the article made was that one can find solutions to any kind of problems, and remedies exist even for this seemingly insurmountable toil. They require of course a level hand and some patience, but making an investment into municipal bonds that are exempt from taxes can provide a nice alternative. As does perhaps an investment into foreign nations that possess stronger balance sheets than the U.S. Or perhaps a well-balanced portfolio consisting of blue-chip, high dividend stocks? The following is a deeper view into the alternatives one can look into when learning how to invest in a low-interest rate niche, and the pitfalls one may encounter on the way.

TAX-FREE MUNICIPAL BONDS

One kind of assets that is almost always unerringly bountiful are tax-exempt municipal bonds. These investments manage to garner higher yields than Treasuries at nearly all maturity levels. And that, even without accounting for the advantages that tax exemption offers to investors. Of course, such a pattern is not a normal one and one cannot reap the benefits of the absence of taxes to no end, since the sooner or later, markets begin to demand certain premiums to be shelled out for tax-exempt municipal bonds. Trends always give way to history. Furthermore, tax-free municipals cannot be the deftest choice for accounts that are tax-deferred, simply because the yields CD’s garner are much higher than those of tax-exempt municipals.

The general rule of thumb prevailing over the market right now is that the primary reason why higher yields are so prevalent at the moment is because the municipal market also carries higher credit risk. However, that assessment may not be as accurate as one may think. Three other alternative lines of reason can be applied to this:

-          Municipal bonds are less liquid than Treasuries; therefore, they possess a premium on liquidity.

-          In order to make an investment in a healthy, well-established environment, one always naturally looks towards Treasuries.

-          There are currently healthy doses of uncertainty and scepticism circling tax-exempt municipal bonds at the moment, as President Obama has already called for federal taxes to be applied to some traders.

INTERNATIONAL BONDS

Presently, there are two major reasons why non-greenback bonds are not deemed a good substitute for high quality dollar fixed securities. One of these reasons, and by far the main one is of course that the involvement of a currency risk in an investment adds to overall risk the investor takes. Once all of the fluctuations and uncertainties of the currency index find their way into your portfolio, the volatility of the investment itself goes through the roof as well. it certainly detracts from the simplicity of the process. The other reason is that trading in foreign currencies directly ties an investor to the equity markets, which always run parallel to stocks, meaning that the investment will do just as poorly as the stock market does.

A perfect example of such a phenomenon would be a look at Australia, a nation that has a debt-GDP ratio of roughly 25%. The country also has a young thriving population and a plentiful supply of valuable natural resources. The S&P 500 Index sank 14 points in the third quarter of the year 2011. Yet those buying into Australian bonds and leaving the currency risk without hedging only went down 10%, since that was the approximate amount that the Australian dollar fell against the greenback. This in essence is the point of the practice. Once a strong flight to quality occurs, the U.S. dollar almost always gains strength against other currencies. As a result of that, foreign bonds begin generating negative outcomes.

DIVIDEND STOCKS

This third option can seem a flawed logic at the core. Exchanging high quality bonds for stocks that pay out high dividends make one question the initial purpose of having bonds itself. One of the most crucial aims of making an investment into bonds is of course to have apt shelter if and when the market tumbles. Yet that factor is far from being a perennially certain one, and can leave an investor unprotected during the worst of times.

In the spring of 2009, the market crash was entering its last stages. The six months before saw 46 firms in total slashing their dividends. The number is a staggering one, when compared to the total of 17 companies who did so throughout the entirety of 2007. The blue chip stocks, which the articles strongly recommended also fell prey to these cuts.

General Electric made an official announcement that it were to cut 68% as part of its very first dividend cut in February of 2009. During the previous month, Pfizer announced a 50% cut of its dividends. Finally, Newell Rubbermaid made two severe dividend cuts in the alarmingly short span of three months, the second one being at the end of March of 2009.

In addition, high dividend stocks are prone to the same inherent risks as regular stocks, as during times of market stress stand the same chance of depreciating in value. High dividend bonds however are exempt from that particular danger. That is why, the attention of investors should perhaps lie with the total returns, which are or course the dividends plus all of the capital appreciation/depreciation. Mere dividends will give your investments peace of mind.

Total returns should also be a main source of focus for investor due to the fact that paying copious amount of attention to high-dividend stocks may cause one’s portfolio to lack diversity, since a considerable number of firms do no pay dividends.

The article’s most feasible and sound suggestion is an investment in tax-free municipal bonds. One should make sure they are of high quality, suggesting a rating of AAA or AA. However, a rating of A could also prove sufficient, if the bonds have less than three years in maturity. Ensuring that bonds belong to strong sectors is also key, with general obligations or essential revenue leading the way.

If that does not bring you close to your ultimate financial goals, then you might consider simply increasing your allocation into a diverse stock portfolio instead of ceding to the latter advice of the article. As interesting as it may sound, foreign bonds and high dividend stocks simply carry too much inherent risks and uncertainties in order to make for a well thought out alternative to traditional trading.

By Chris Termeer

Brent crude oil prices for February settlement gained 24 cents and settled at $111.58 per barrel on the ICE Futures Exchange in London. The European benchmark spent some hours in negative territory at the beginning of the session, as US traders first began making moves on the charts.

West Texas Intermediate crude oil futures for delivery in February gained a considerable $1.44 to settle at $100.14 per barrel in electronic trading on the New York Mercantile Exchange. The contract did not deliver a final settlement price yesterday due to a holiday.

According to the latest financial reports, China’s fourth quarter Gross Domestic Product numbers came in at 8.9%. The positive figure bolstered both the commodities and equity markets, and while the rising market volumes pared down some of the initial gains, the energy sector spent the bulk of the session in firmly positive territory.

Analysts have stated that the impressive gains posted by WTI crude oil prices are merely the contract catching up to its day-long absence from yesterday, and that Brent’s much more modest showings are a more accurate portrait of the state of affairs on the charts. Though China’s numbers are undoubtedly good news, they do little to abate old fears surrounding the debt crisis in Europe.

China’s GDP, while weaker than the several previous quarters, is still well above the projected estimate. The initial concerns were that the debt issues in the euro zone would force the region to cut down on their purchasing of Chinese goods, which would subsequently bring down fuel consumption in the nation. Nonetheless, China’s crude demand rose constantly through the year, and finished December on an all-time high of nearly 10 million barrels per day. The country’s much=expected monetary easing is however still far away.

Outside factors also played a part in the gains the crude oil price charts experienced Tuesday. Germany’s analyst and investor sentiment rose considerably for the month of January, showing an increase of more than 30 points. The sharp bump was primarily credited to the European Central Bank’s recent cash boost, which has left Europe’s banks brimming with funds.

Crude oil prices found more support in the West, where the US has reported a thriving manufacturing sector and optimistic retail numbers.

The weakening dollar also played its part in propelling crude oil up the charts. The greenback sank 0.42% against the standard basket of currencies, as the upbeat mood permeating the sector convinced traders to shift their attention towards riskier commodities. Crude oil prices tend to rise whenever the euro gains against the dollar, as foreign investors flock to the more affordable product.

Tensions and disputes surrounding Iran continued to weigh on the minds of both traders and economists, yet with little concrete action developing in the area at the moment, crude oil continued to receive steady support.

The current president of the European Union, Denmark, has proposed that the bloc support the US’s request for a full embargo on Iranian oil starting from July 1^st. The allotted time would then allow for nations to uphold their end in already-existing contracts. Asia’s largest consumers of crude oil are currently in the process of seeking out alternative suppliers for their energy demands.

Brent crude oil prices for settlement in March rose $1.11 and settled at $110.97 per barrel on the ICE Futures Exchange in London, while West Texas Intermediate crude oil futures for delivery in February gained $1.05 to $99.38 per barrel in electronic trading on the New York Mercantile Exchange.

Oil investments in both benchmark contracts continued to rise throughout the session, as Iranian officials kept up their threats of closing some of the key exporting routes out of the Middle East.

The upturn in crude oil prices and oil investments may be short-lived however, since no immediate bans will actually be implemented. Those EU members in possession of existing contracts with Iran will have until the first day of July to square away their affairs. Some economists and analysts remain skeptical as to whether the fuel will be able to sustain its leads until that deadline, and whether the ban will actually be utilised to its full extent.

Crude oil also saw support from the currency index, where the dollar fell further down against the euro, prompting foreign traders to flock to the commodity. The upswing in the euro was credited to new advancement being made on the road to negotiating with the creditors of the sovereign debt of Greece. The addled nation’s tumble down the financial charts was the occurrence that set off a chain reaction in the euro zone, prompting recession fears to reignite.

An unstable economy in the US, and a downright struggling on in the European bloc may spell grim results for crude oil in the new year, yet falling supplies and persisting political disputes have already proven themselves capable of reversing the negative trend, with both Brent and West Texas Intermediate figures standing comfortably above the $100 per barrel mark.

With the sanctions against Iran now approved by the European Union, it now looks like Iranian oil will soon be completely removed from the West, Europe and Asia. Though both China and India have expressed an interest in purchasing whatever oil Iran fails to export elsewhere, the embargos will still present many large nations with supply issues, ones that are sure to bolster crude oil prices on the charts. Saudi Arabia’s proposal to make up for Iran’s stalled production however could even out the spread. OPECs reduced spare capacity is still at play here, and further drops will likely keep futures up for the first quarter.

Nigeria’s lingering internal disputes and hostilities are also threatening to undercut the nation’s 2.5 million barrel output. Africa’s key crude player is currently riddled with quarrels regarding abandoned fuel subsidies and general instability.

South Sudan’s announcement that it plans to halt all production of oil may also affect crude oil price charts. The statements out of the region come as backlash against accusations that Sudan has been seizing product from the southern territories.

President Obama’s expected rejection of the crucial Keystone XL pipeline will also play a huge role in dictating what paths crude oil will take in 2012. The ambitious pipeline was expected to boost crude oil prices to considerable heights, as it would have effectively removed oversupply issues in the US.

The vast majority of the world’s current major stock markets this year have season seats in negative territory. Yet there have been instances of funds and individual shares that have performed impressively well in the face of a seemingly insurmountable obstacle of the debt crisis in the euro zone. Will these success stories of investment persist in the year 2012, or will they abate to cede space to other underdogs? Statistics for the year show that almost all of these outperforming funds are either corporate or government bond funds. These funds have typically profited from recurring waves of investor panic. Their futures rose in surges, as riskier assets crumbled and people flocked to safer havens.

Precious Metals funds have been one of the best success stories of the year. Several prolific firms posted more than 22% in futures increases over the year, thriving on the perpetually-rising global inflation rates. Each time high-profile investments such as crude oil or copper faltered, traders dropped all of their holdings and ran to the gilt sector to wait out the crises. Yet, the question remains: will the sector continue to thrive in 2012, or should safe haven-reliant investors look elsewhere?

Many analysts consider that gilts are simply overpriced. They appeared overpriced this year, and with the impressive gains they have built up so far, an investor looking to place money into a safe asset, gilts will simply look too expensive. Both gilts and U.S. Treasury bonds have enjoyed a profitable year-long run on the charts. However, that growth more or less crippled their advancement projections in 2012, as they are already circling their metaphorical ceiling. The lack of sureness over the path Europe’s debt crisis will take in the coming year also makes investments in gilts much more of a gamble than a safe bet.

Strong, well-established companies with long-proven sustainable earnings are the choice of many economists for the year. Though the developed world likely faces a protracted bout of stalled growth, it also possesses the underlying foundation to sustain a crisis. Companies that yield sustainable dividend growth and earning potential are still present even in these tough economic times.

Some of the most evident well-established sectors that will likely hold their own in 2012 are the food, drink and pharmaceutical sectors, otherwise known as the defensive sectors. These have performed well in the face of the continually unravelling debt crisis in Europe, and there is little in terms of obstacles to suggest a reversal of that path. Defensive sectors exhibit steady growth, rather than strong rallies however, and they provide little opportunity for quick profit. Yet for those who want to commit to a strong and well-rooted investment, pharmaceuticals especially can be a solid base.

Companies manufacturing computer chips have also outperformed this year. The perpetually rising demand for mobile phones, specifically “smarter” mobile phones ensure traders with plenty of growth potential, and make chip makers a wise investment strategy.

Some analysts have been advising people to convert their assets into cash until the market stabilizes itself, and until a cleared path of action becomes evident for the European crisis. Yet the wild fluctuations that most sectors have displayed over the course of the year suggest that those carrying cash may well run the risk of missing out recovery opportunities.

European leaders’ repeated inability to provide the addled region with an apt resolution measure have also instigated massive opportunities to buy into falling equities. Those relying on a more concentrated plan of attack for Europe in the year 2012 may benefit greatly from these investments once the markets begin bouncing back.

Both Asian shares and base metals suffered losses similar to the plunges crude oil reported yesterday. The euro collapsed on the currency index today as well, sinking to its lowest in almost a year. Dollar-priced commodities such as raw metals and crude oil prices tend to mirror the regress of the euro on the charts, as foreign investors lose interest in trading when the greenback prospers. The markets are still reeling from Europe’s most recent failure to curb its debt crisis, and Italy’s surging bond yields could be the last nail in the proverbial coffin for the region. The debt-addled nation is now forced to pay 6.47% on its five year bonds, marking a record high yield in the history of the euro.

Crude oil price charts suffered their most acute damage for the week from the outcome of OPEC’s summit in Vienna, which took place yesterday. Though both investors and analysts were already bracing for a decision to elevate production rates from the prolific cartel, some hope was retained in the sector that the group would opt to trim down output in order to give global demand a chance to heal. However, representatives from OPEC stated for the record that with Libya’s full-scaled return to the market still unfeasible, the time is perfect for the group to amp production for 2012.

Brent crude oil prices for January settlement, a contract that expires today, rose 15 cents to $105.17 per barrel on London-based ICE Futures Exchange. The European contract fell $4.48 yesterday, when OPEC’s decision first reached the markets, marking the biggest loss for the commodity since the end of September.

West Texas Intermediate, Brent’s U.S. counterpart settled a nominal cent higher for the day at $94.96 per barrel in electronic trading on the New York Mercantile Exchange. The American benchmark crude prices retreated more than $5 when news of OPEC’s output raise broke out.

The uncertainty and growing anxiety surrounding Europe is also a major factor still keeping crude oil investments down. Though the region’s heads have made countless attempts to reach a clear and focused path of resolution in battling its massive debt, little has been produced from those meetings in terms of long run strategies. The commodity market jumped in the days preceding each meeting on speculation and newfound confidence, only to plunge back in the hours following. Signs of armour cracks in the last two remaining strong economies of Europe, Germany and France, are also worrying for traders and economists, as the two nations represent the last frontier a recession would have to take before the region’s economy collapses.

Yesterday’s session was a revelatory experience for many holding stakes in crude oil. Brent futures fell below their 300-day moving average of $107.08 and sank as low as $104.36 per barrel. The figure is the lowest front-month showing for the European contract since early October.

WTI crude oil prices suffered similarly, dipping below their 200-day moving average of $95.98 per barrel. Commodities such as crude oil tend fall sharply when technical barriers like moving averages are crossed, which is why its futures fell so steeply overnight.

The list of negative factors at play for crude oil seems to only be growing however. China’s most recent reports show a drastic fall in factory production, with plenty of pulled orders and a severe lack of new orders coming in. The data has further deepened belief that the nation’s manufacturers are struggling with dwindling global demand and increasingly limiting domestic credit. Though the showings of the HSBC flash manufacturing purchasing index still shows a rather modest contraction, unless global demand recovers, it could lead to a dour first quarter of 2012.

OPEC’s new standing 30 million barrels per day output cap marks the first time the bloc’s production ceilings have been tweaked in three years. Despite the fact that one the main purposes for the meeting were the escalating disputes surrounding supply policy details and Saudi Arabia’s involvement, the members of the cartel put off discussing individual production rates until Libya was fully prepared to enter the playing field. However, with the foundation beneath crude oil price charts increasingly shaky, OPEC’s meet failed to generate a potential response policy in case already damaged demand grows less quickly than estimated. What the cartel essentially did in the eyes of crude investor was boost supply to abnormal rates, with demand already floundering in the deep. Furthermore, OPEC left itself little in terms of an exit strategy in case the situation worsens beyond repair.