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Showing posts with label Oil. Show all posts
Showing posts with label Oil. Show all posts

Sunday, May 8, 2011

Brent Oil Down 13% by Algorithmic Trade

Just last week, oil futures dropped the greatest in a week since December 2008. Brent oil was down 13% to US$109.13. What is the significance of this sudden plunge? And how did it happened in the first place?

About two years, I wrote a similar analysis on such anomalies.

http://denzukefinance.blogspot.com/2010/09/coming-correction-because-of-selling.html

Monday, December 13, 2010

A World Without Oil National Geographic

Try to use your imagination. Use your illusion. Picture ...

A World Without Oil - by National Geographic. I just saw it last night.

Human civilisation would crumple in less than a year when there is no oil. The exponential shift in civilization, warfare, politics, economics, healthcare, transportation, virtually any genre, field, or sector - is fuelled literally by oil.

Lipsticks? Yes made from oil which includes most cosmetics.

Antihistamine? Yes made from oil. Sniff sniff!

Shoes ladies and men? Yes made from oil. Equally guilty Gucci or Jimmy Choo.

Detergent and disposable diapers? Yes, a baby is guilty of being an oil consumer as soon as the day of independence.

Toothpaste - yes and perhaps a deep YES for those who hate to brush their teeth.

Insecticides and repellant - yes.

Lubricant for the car, for machinery - yes oil.

Refrigerators - yes the demise of CFC doesn't make you greener.

And a whole bunch of other "stuff"! Virtually every other thing you may be in contact with will have a ingredient coming from oil or petroleum.

Monday, November 22, 2010

Oil and gas - KNM gets momentum

Would you buy a stock with a potential to go 5 fold ups? Taking a historical approach, KNM is trading at 40 sen. The all time high is over $2.40 during the 2007 oil grab.

KNM Group Berhad is engaged in investment holding and the provision of management services. The Company and its subsidiaries are engaged in the designing and manufacturing of process equipment for the oil and gas, petrochemicals, minerals processing, desalination, renewable energy, environmental and power industries. Its products and services include process gas waste heat recovery systems, membrane technology systems, sour gas and sulfur technology, compression systems, fired and heat recovery boilers, quench coolers, scraped surface exchangers, process and pressure vessels, heat transfer equipment, storage facilities and others. Its direct subsidiaries are KNM Process Systems Sdn. Bhd., KNM International Sdn. Bhd., KNM Capital Sdn. Bhd., KNM Management Services Sdn. Bhd., KNM Renewable Energy Sdn. Bhd., KNM Capital Labuan Limited and KNM Services (Singapore) Pte. Ltd. In July 2009, the Company, through its wholly owned subsidiary, acquired Compart Technology GmbH & Co.
  Wright Quality Rating: CBA2

Historical chart wise, the price is at the bottom of an upside down bell curve.

KNM has just signed a new contract with Lukoil Uzbekistan. Total job wins exceed RM2 billion YTD.
Buy suggestions because:
1) Fundamentally KNM has been improving.
2) Inexpensive price - this is one of the methods of risk management.
3) Oil and gas going upwards again.
4) Last few laggards that haven't pick up much after this years double rally. Most top market capitalised companies have gained on average 40-50%.

Will be exploring other choice picks that seems to have been left out by investors and speculators. Finding the gems is a lifelong quest.

Friday, October 1, 2010

Oil price and Collapse the movie

Oil prices peaked at over $150 USD per barrel. Then it collapsed. But what is the significance of this short collapse today?

The movie Collapse is about how oil plays a major role in every aspect of the modern human being's life. We cannot get untangled. Its alas, all linked up. Michael Ruppert's investigation and in depth analysis goes a long way and drives in the irrepressible fact that this finite source of stored-energy will be depleted. The process of depleting it is continuously exponential, the various solutions prove to be futile, and the chase to "increase a nation's GDP" is not sustainable. Before the end of the line, chaos would have reigned and brought in Armageddon before the last 10 barrels of oil will be ever used.

The significance for us: Now USD is going on a steep downtrend. 20 years or so ago, 1 USD bought 2.70 ringgit (Malaysian Ringgit or MYR). It went to a high of 5.00 ringgit, and then fixed at 3.80 for a decade, and now retracing back to 3.00. Every item - inversely like Midas - is almost a by-product of oil and its derivatives. Connect these words and a factual financial sentence will form.

Food - pesticides - fertilizers - trucks - plastic containers - garbage bags.
Toys - plastic - trucks - driving to work - bags.
Car - interior - -plastic - oil - petrol - plastic casings.
Having a shower - soap, shampoo, mat, water knob.
Having a vacation.

That plastic chair you're seating. Oil. Petroleum base product.
That spoon you used for the creme brule. Fetch here by trucks - oil consumed.
Going to school. School bus. Tapes. Make-up. Clothing. Packaging.
Your house. Colourful paint for your home. Alarm system.

Therefore: this insatiable demand will rise exponentially again. 3 years - 5 years? 10 years. Think of oil companies and oil related. Such as Ezra, CNOOC, Petronas, China OilField, KS Energy.
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