by Robert Lenzner
The growing mantra to see your gold and replace it with oil is being promoted by the Bank Credit Analysts, an advisory service in Montreal often followed by conservative, prudent investment managers in the US. Crude oil futures in the US are selling at $85 a barrel, $16 less than Brent crude futures in London, a peculiar differential that could offer a unique investment opportunity.
On the side of oil going higher are growing unrest in the Middle East, 3 gas explosions in Iran and safety problems with the Alaska pipeline. With the dollar stronger last week, and Mubarak’s departure, gold did not streak upward as a haven against political unrest.
James Joslin ,CEO of TFC Financial Management in Boston, signs on with the Bank Credit Analysts that gold is for speculators, central banks like India, and only some investors. “Today, gold($1400 an ounce) as the basis for jewelry production, is losing its allure.” Instead, TFC prefers the Van Eck Hard Assets Fund,(GHAAX) which is very heavily weighted in energy shares such as Schlumberger,(SLB) Halliburton and Weatherford Intl, Anadarko, Freeport McMoran.
As well, Stephen Leeb’s Complete Investor, underscores that “peak economic oil is clearly at hand,” and suggests Chevron,(CVX) ConocoPhillips(COP) and Occidental Petroleum(OXY) as best ways to play the probable rise in the value of oil reserves already discovered and in process of development. CNOOC, the Chinese oil producer, is planning to spend 20% more than Exxon in seeking further offshore and overseas assets. It is a major play in deepwater offshore fields of Brazil along with Petrobras.
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