Tuesday, January 04, 2011

Lithium and REE: Oil Trades Near 27-Month High as Economic Recovery May Boost Energy Demand tnr.v, lmr.v, rm.v, alk.ax, sqm, fmc, roc, lit, li.v, wlc.v, clq.v, res.v, ree, avl.to, nsany, f, gm, rno.pa, dai, byddf, hev, aone, vlnc


  Oil price is moving up and if we are so close to 100 USD per barrel now, what will happen when recovery will be stronger on its feet? Now we have the record unemployment numbers and housing is struggling to keep itself from double dip in the USA - the key is that it is not about U.S Corp any more:

For our investment thesis and Next Big Thing it is the very important speech and comparing Peak Oil situation and Energy Security to "Sputnik Moment" by Steven Chu is very timely. We are advocating here for the state-level comprehensive plan to save America, like it is implemented now in China. Just listen to the US Secretary of Energy describing what China is doing now and how far it has surpassed U.S. already!
  We all need to waken up as with Russian Sputnik flying above us and implement complex electrification of our transportation with the same devotion and allocation of necessary resources as "Manhattan project" was done. This time it can save the world as we know it.
  Watch the second video from Cancun below, where Steven Chu talks about Oil as per IEA groundbreaking revelations about Peak Oil:  "Oil prices will be higher from now on."

"This year we have a staggering number of reports and warning on the looming Peak Oil situation. It takes time for reality to settle in, particularly, when nobody knows what to do with it. We have put REE in the headline and only few months ago we would have to explain, what is it all about - now suddenly everybody is talking about REE and stocks involved in Rare Earths are all making new highs. It takes a crisis for us to realise that fundamentals are driving the real trends. Sudden realisation that China controls more than 90% of REE market and their reserves maybe will last only for another twenty years, created the catalyst in the market place. What will it take to realise that we are running out of cheap oil? Another crisis?
  We are talking here about the powerful mega trend Inflation multiplied by Peak Oil situation - we have to move and readjust our society. Our Energy diet is not sustainable any more. We are lucky in a sense that there is technology available to us to survive the Oil Shock if we will all move fast - Electric Cars. It is our Next Big Thing and at the heart of this disruptive technology lie strategic commodities: REE and Lithium."

  The sector is very small - now is the time to find and pick up value among the hype, backed by strong  shareholders and based on 
solid portfolio of Lithium and REE properties. Headlines from China, Jim Puplava and James Dines are moving REE into the mainstream in the investment space now and Lithium will get its recognition one day as well. Only few companies left without strategic investors in the sector, when even only this catalyst can bring the transformation to the junior from a holding company into actively pushing into production developer. It will bring multiples to the dormant valuation.

  We will provide some links for the further homework here:


Oil Trades Near 27-Month High as Economic Recovery May Boost Energy Demand

Oil traded near a 27-month high in New York on signs that the economic recovery is gathering momentum and reining in excess fuel stockpiles.

U.S. crude inventories probably fell last week in their longest decline since 2009, an Energy Department report tomorrow may show. Futures advanced as high as $92.58 a barrel in New York yesterday after the Institute for Supply Management’s U.S. factory index climbed to the highest in seven months. European manufacturing also grew more than estimated, powered by an export-led expansion in Germany.
“The actual situation remains quite bullish after some supportive figures on the U.S. economy,” said Hannes Loacker, an analyst at Raiffeisen Bank International AG in Vienna. “But for the next couple of weeks it will be hard for crude to move substantially higher as fears about Chinese growth exert some drag, and the euro debt crisis will be back on the table.”
Crude for February delivery traded at $91.84 a barrel, up 29 cents, in electronic trading on theNew York Mercantile Exchange at 12:15 p.m. London time. Yesterday, the contract rose as high as $92.58, the highest price since Oct. 7, 2008. Brent crude for February settlement gained 65 cents to $95.49 a barrel on the ICE Futures Europe exchange in London.
The U.S. factory index climbed to 57 last month from 56.6 in November. A reading greater than 50 points to expansion. Construction spending in the nation, the world’s biggest oil user, rose in November for a third month, boosted by federal government projects, the Commerce Department said yesterday.
An index measuring factory activity in the euro area rose to 57.1 in December from 55.3 the previous month, London-based Markit Economics said yesterday. That’s higher than the 56.8 reported earlier for the month.
Bullish Bets
Hedge funds raised bullish bets on crude in the week ended Dec. 28 to the highest level in more than four years, on speculation that futures will continue to climb as the U.S. economy recovers. Oil rallied 15 percent last year, adding to a 78 percent surge in 2009.
The funds and other large speculators increased net-long positions, or wagers on rising prices, by 4.6 percent in the seven days ended Dec. 28, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. It was the biggest total in records going back to June 2006.
Crude has advanced as U.S. stockpiles shrink, signaling increased demand. Inventories are expected to have dropped for a fifth week last week, the longest decline since July 2009, according to a Bloomberg News survey. Supplies fell 1.75 million barrels from 339.4 million in the week ended Dec. 31, based on the median estimate of eight analysts.
Fuel Supplies Increase
Gasoline stockpiles probably increased 50,000 barrels from 214.9 million, the survey showed. Distillate fuel inventories, including heating oil and diesel, may have climbed 625,000 barrels from 161 million.
The Energy Department is scheduled to release its weekly report at 10:30 a.m. tomorrow inWashington. The industry-funded American Petroleum Institute, which collects stockpile information on a voluntary basis, will issue its data today.
“In the U.S. and euro area, people are looking for any signs of recovery and for that to flow on to demand,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. The manufacturing data “would have had a positive impact.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net

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