While many developed sectors of the euro zone have fallen into recession-like patterns, there are parts of the place that are thriving and are worth looking into.

With Spain, Italy and Greece’s stock indexes tumbling, some may see these countries as bargain bins for investments. Yet with recessions plaguing the euro zone, many things could still go south.

Instead, all potential traders should look north. Germany is back from the fray and doing very well. Its export-minded economy is thriving and its finances are healthy, which is not something most European corners can say. Germany’s industrial sector in particular has found new life and is an exciting new investment opportunity.

Despite its recent election troubles, France remains one of the strongest economies in the euro zone. Though labor costs will likely soar due to the new Socialist government in place, France’s stocks have plunged recently, leaving plenty of elbow room for profit once they bounce back. As it stands now, the nation boasts nearly 10 times forward earnings.

Experts continuously say that one of the best things about the French equity market is that its negative factors are usually priced in, leaving plenty of room to grow.

Some investments, however, present more entrapments than profit. Mutual funds in the euro zone obviously hold assets from all sides of the spectrum, including the South, which is currently floundering under the weight of debt and political turmoil. Therefore, traders looking for a wise investment would do better in sticking to individual stocks.

The size of sand in Wisconsin is perfect for fracking underground shale formations that are rich in oil and petroleum products.  That is why mining firms have been investing in facilities capable of processing Wisconsin sand.

Big oil firms don’t want to be left out either. For some, oil investment has expanded to include putting up their own frac sand facility just to ensure steady supply of this type of sand, which is now in extremely high demand. The cost to construct one wet and dry facility is around $50 million, according to Barron County administrator, Jeff French.

According to Superior Silica Sands CEO Richard Shearer, “The economic benefits are substantial, to say the least.”  Late last year, his company invested $70 million to build its New Auburn processing facility.  Another plant he said will be opened soon in Clinton Township.

Sand processing starts with removing top soil and reserving it for use in reclamation.  Frac sand is excavated and shipped to a wet facility that rids it of clay and impurities.  Sand grains are sent to another plant for drying and sorting by size. Finally, the newly sorted sand grains are delivered to various oil sites along states like North Dakota and Texas, among others.

Some oil companies no longer invest in oil production and drilling alone, but have also allotted investible funds for putting up mining facilities in Wisconsin.

According to Barron County Economic Development Corporation, two more mining companies – Texas’ Great Northern Sand and Chieftain Sand of Arkansas will construct processing facilities in Town Dovre which is close to United States Highway 53. These two, along with Superior’s New Auburn facility will have access to railway systems run by Progressive Rail.

Shearer said “It’s very expensive to haul this product around the country.”  He added that access to transport systems is very crucial.

Plant owners will have to get numerous permits before they are allowed to operate, because operating a single plant does trigger various environmental concerns.  Air pollutants are emitted into the air, substantial volumes of water for drilling are expended (approximately 125 million gallons), and there are noise and dust issues to contend with.

The frac sand mining industry is relatively new, but already, some sectors are lodging complaints and seeking for moratoriums.  The counties of Goodhue, Houston, Eau Claire and Buffalo are just a few groups pressing for temporary suspension.

These may ward off oil firms from pursuing and investing in sand mining and processing businesses, and instead focus on investing in oil exploration, fracturing, and production ventures.

By Chris Termeer

The report cautions that if that happens, that will be an unfamiliar territory to the global economy which hasn’t seen those kinds of oil prices for over several months.

The new “working paper” of the IMF came as globally traded crude remains at a historically high oil price per barrel rate of $113;  and following the report of the IEA that oil consumption will hasten for the remainder of 2012 because of the wider recovery of the economy.

Undertaken in the midst of increasing concerns regarding “peak oil,” the study of the IMF does not assume there’s a limit on the amount of oil available beneath the surface. It opts to think that the rate of extraction will be according to the cost that will be charged on the final output.

The report entitled the Future of Oil: Geology vs Technology argues that, although the model isn’t as negative as the exclusively geological view that usually affirms that necessary resource limitations will bring oil production to an unstoppable decline in the coming months, the projection of small, additional rises in oil production worldwide happens at the expense of a permanent doubling of inflation-adjusted crude oil prices during the next ten years.

An important disclaimer was attached to the paper stating that it is not representative of official IMF views. Instead, it was merely drafted by several former officials of the agency such as Jaromir Benes, Czech National Bank’s macroeconomic modeling’s former head and current employee of Washington’s IMF.

The report says that models of oil markets have been practically more accurate compared to others in a world with historically low predictability. However, it adds that empirical figures also show that if the prediction of the model keeps on being accurate just as they were in the past decade, the future won’t be easy.

In the meantime, the International Energy Agency, which gives energy policy advice on industrialized countries, said that per barrel oil prices will stay high this year because of the tensions between the West and Iran. According to the agency, the market’s fundamental path for the remainder of the year stays very unsure, and geopolitical risk still remains an important component of current crude oil prices.

The agency thinks that a time of decreasing demand caused by the global economy’s slowdown is now through, and the rising trajectory will soon began again.

OPEC, the Organization of Petroleum Exporting Countries, made the same statements last week, saying that the growth of oil demand has ceased its downward trend.

By: Chris Termeer

The US Department of Energy issued a report today stating that, while gasoline and distillate stock has gone down, crude oil inventories have risen almost 4 million barrels. Cushing, Oklahoma now stores more crude oil than it has in more than twenty years. Equity markets dipped as a result of such drastic overstock, as economists predicted weak demand.

West Texas Intermediate crude suffered another severe drop in investments, currently standing at $96.81 per barrel on the NYMEX. Prices of the benchmark have now fallen almost 9% in just six days.

Brent crude prices for June settlement mirrored the downturn in WTI, falling 47 cents to $113.20 per barrel on in London’s ICE market.

Greece’s stalemated coalition government elections stood at the forefront of crude’s struggles for the day. The debt-addled nation is close to 500 million euro in debt, a bill which has to be paid up by mid-May. As a result of the nation’s indecision, the euro has slipped against the dollar on the currency index, preventing foreign traders from investing in oil altogether.

Spain’s return into recession also weighed on the minds of the region and the globe. The nation’s debt now stands at a staggering 180 billion euro, a figure that would be difficult to cover even with a proper bailout package.

As it stands now, crude supplies are expected to continue rising at a much faster rate than demand in the debt-ravaged West, making oil investment a questionable affair.

By: Chris Termeer

Canada exports an oil blend called Western Canada Select, while it imports Brent; but the $30.50 crude oil price per barrel differential is hurting its economy says Mark Carney, governor of Bank of Canada.

Canadian Imperial Bank of Commerce (CIBC) said Canada’s deficit (arising from the gap) is C$18 billion per annum, but others estimate it at C$19 billion.

One Canadian firm, Bankers Petroleum Limited, is fortunate to have oil productions in Albania so it can sell at prices equivalent to Brent oil. The opportunity to profit from crude generated outside of Canada puts it in a more advantageous financial position compared with firms producing within Canada alone.

According to BMO Harris Private Banking Chief Investment Officer Paul Taylor, “That differential is probably going to stick for some time.” He added that the current Middle East crisis pushed up Brent crude oil prices, while shortages in Canada’s crude exports in Oklahoma may extend further.

About 7 years ago, high crude prices helped propel Canada’s economy. There was a surge in investments, and this offset the negative effect of prices on consumers by a comfortable margin. Nowadays, this does not hold true anymore as price gaps have occurred, adversely affecting Canada’s domestic revenues.

Canada’s oil sands producers are boosting investments, hoping to increase oil outputs at Alberta by more than two-fold. Unfortunately, despite ramping up production, Canada is still deep in deficit. It is a net oil exporter affected by account gaps just like Mexico and Sudan.

This deficit may thwart PM Stephen Harper’s plans to present his country as a superpower in energy production. Some camps have expressed their views on how to deal with the issue. The country’s New Democratic Party disagrees with building more pipelines, saying it’s time for Canada to process crude oil domestically rather than have it shipped out to Texas.

Still, some others support a re-piping of existing lines, purposely to post better current crude oil prices for domestic oil. They have cited development of Trans Mountain pipeline as well as the reversal involving the Seaway pipeline.

Still, Canada’s currency remains at par with U.S. currency, owing to high cost of oil and high prices of non-oil commodities being manufactured and subsequently exported by the country.

PM McGuinty disclosed “If I had my preferences as to whether we have a rapidly growing oil and gas sector in the west or a lower dollar benefiting Ontario, I’d tell you where I stand – with a lower dollar.”

By: Chris Termeer

Modifications in Europe’s political situation following the election of a new leader by France and the inability of Greece to create a new government pose trouble to a currently sensitive outlook for the region that is stricken with debt. Meanwhile the growth of the United States economy has weakened after a drop in jobs creation.

Brent crude prices increased by 43 cents to reach $113.59 per barrel. The intraday oil price recently declined to its lowest since the 30th of January at $113.59. But it recovered immediately to finish at $113.16 per barrel which is lower by only 2 cents. In the last four sessions, Brent lost by 5.4%.

Current crude oil prices in the United States dropped for the fifth consecutive day. It traded lower by 12 cents at a price of $97.82.

Mark Pervan, said that there have been some bargain hunting from investors with the thought that prices were oversold following another plunge of $3 at the beginning of the trade.

It appears that wider markets will be vouching in the possibility of an announcement of another refinancing operation in Europe for the long term. That will most likely support oil markets in the future.

There was a recent recovery of riskier assets and shares with improvements in sentiments due to hopes that Spain will use public money to help struggling banks even if wariness stays over Greece.

The purchase of oil from commercial hedgers like shippers after its recent decline of $3 supported Brent crude prices, said Newedge Japan’s commodity sales manager Mr. Masaki Suematsu.

According to Suematsu, the outlook of the economy is not very weak since the market is still anticipating QE3. He also said that there is a lot of liquidity for global market support.

As a support to the economy of the United States, the Federal Reserve is anticipated to begin a third set of  quantitative easing or government bond buying recognized as QE3 in markets.

By: Chris Termeer

Global giants are strictly monitoring the affairs of both countries. The U.S., for instance, has prepared a United Nations Security Council resolution calling for a cessation of hostilities and peaceful negotiations.  China also encouraged the opposing countries to bring the situation under control but, like Russia, China is not expected to embrace the idea of imposing more UNSC sanctions in light of these conflicts.

South Sudan has since gained its independence from Sudan, but the two have become hostile with one another due to oil and borderline issues. Of late, tensions have been escalating, prompting the IEA to announce that the rise in crude oil prices per barrel has been affected by the considerable decline in Sudan’s light-sweet crude oil production.

Based on images and video coverage, it looks like the Heglig oil site located near the border separating Sudan and South Sudan was impaired by armed fighting. However, the extent of damage could not yet be deciphered. Nevertheless, IEA predicts that starting July, South Sudan’s oil production may reach a low 100,000 bpd.

Last year, both Sudan and South Sudan were able to produce an estimated 425,000 barrels of oil per day, on the average. Of this volume, two thirds was exported to China. As South Sudan curtailed production of oil due to transit charges issues, some 350,000 bpd of oil are lost.

China has oil interests on both Sudan and South Sudan.  Apparently, it’s going to be a win-win situation for the country, regardless of the outcomes.  Heglig oil plant is operated by GNPOC, 40% of which is owned by CNPC of China. Recently, it has bolstered its interest by stating that it will financially assist South Sudan through a loan facility amounting to $8 billion. It will be used to build infrastructure and finance agri-related and hydropower projects.

South Sudan is trying to overcome its reliance on Sudan for oil transport and has been looking at China for aid in the installation of new pipelines going through Kenya. No concrete agreement has been reached though.

The majority of oil fields holding light sweet crude oil are in South Sudan territory but oil plants, pipelines, and depots, which are also critical, are all located within Sudan. Conflict between the two has been aggravated by these circumstances.

Contrary to IEA’s statement, a few observers noted that the 350,000 bpd cut in oil production have little effect on current crude oil prices, but for South Sudan whose oil exports comprise more than 90% of total revenue, the impact is just too huge.

By: Chris Termeer

While in Nevada, the President said that “The attorney general’s putting together a team whose job is to root out any cases of fraud or manipulation in the oil markets that might affect gas prices, and that includes the role of traders and speculators.” He added that his administration will ensure that the interest of U.S. consumers won’t be compromised by illegal trading practices in the oil market.

Just recently, the government formed a team that would probe if gas and oil prices are being pushed up further through unlawful means.

State agencies, including state attorneys general will form part of a team that will investigate any scams, conspiracies, or falsifications occurring in both the retail and wholesale markets. Furthermore, it is also tasked to review trading practices and investment strategies of traders and speculators in the oil futures markets.

Crude oil futures had surged by more than 20 percent, while gas shot up by 34 percent during the year. Both oil and gas futures contracts reached peak levels in April. This is the highest recorded since 2008, and for this, Obama has been receiving criticism left and right.

Experts however noted that the sharp rise in oil and gas are due to the current decline in supplies as triggered by ongoing conflicts in countries within the Middle East. Prices were also pushed up by the surge in oil demand, owing to world economies that have started to pick up.

Meanwhile, regular gas prices averaged at $3.84 per gallon. AAA observed that this is the highest recorded since 2008.  The President said that the steep prices of gas pose serious problems.  He empathized with consumers, saying that “Every time you go to work, a big chunk of your paycheck is eaten up.”

During his speech at ElectraTherm Inc., an energy-generating firm that uses heat from waste, he stressed that the Republicans’ proposal to reduce the state budget bars the government from pursuing key investments in the latest energy technologies being employed by firms like ElectraTherm.

He also took the opportunity to reiterate his proposal to curtail annual tax subsidies enjoyed by oil firms to the tune of $4 billion. He urged the crowd by saying “Instead of subsidizing yesterday’s energy sources, let’s invest in tomorrow’s.”

By Chris Termeer

Meanwhile, the National Statistics Institute of Madrid announced that GDP contracted by 0.3 percent on the first quarter of 2012, causing front-month futures to decline for the very first time after a week.  The U.S. currency strengthened versus its euro counterpart, prompting oil prices to drop at a much faster rate.

According to PFGBest analyst, Phil Flynn, “Concerns about Europe have been weighing on the market for a long time.”  “Today’s Spanish headlines are worrisome. The personal spending numbers here are a positive economic signal which pushed the dollar higher and as a result hit commodities,” he added.

Crude oil futures for June fell by 6 cents and remained at $104.87 per barrel level on the NYMEX. Crude prices went up by 1.8 percent from the previous month. Year-to-date price increase is 6.1 percent.

On the other hand, futures contracts for Brent oil dated for June fell by 36 cents and settled at $119.47 per barrel at the ICE Futures exchange.  This is the first monthly decline since December 2011.

The debt crises which resulted in a slump in economies swept over the European region, starting off in Greece and spreading across countries like Spain and Italy. The U.S. currency kicked up by 0.1 percent against the euro, discouraging investments in raw materials.

On the spending front, consumers were seen to have spent more in March and figures indicate that it’s the largest improvement since August of 2009. Consumer incomes likewise increased. Based on data from the United States and Asia, global economies as well as oil demand will take on a slower pace.

Asian economies, meanwhile, see Taiwan taking slow steps towards growth, while unemployment rates in Singapore rose surprisingly.  Industry outputs in South Korea also slowed down last month.

Crude prices are expected to register at the $100 to $120 per barrel range for now, according to CE of Genel Energy Plc’s Tony Hayward. Hayward added that demand is inching up, so expectations of prices dipping to below $100 are far-fetched.

Crude prices in N.Y. were pegged at $110.55 first day of March, despite rumors that U.S. and EU sanctions on Iran would impede Middle East oil shipments and new investments in oil transport systems to and from Iran. As conflicts have eased a little, oil prices have lowered by 5.1 percent from their March 1 high.

By Chris Termeer

West Texas Intermediate crude oil prices for delivery in June rose 43 cents to $104.55 per barrel on the NYMEX market. This marks the highest end of the day settlement for the benchmark commodity since the beginning of April.

Brent crude oil investment mirrored the success of WTI, gaining 75 cents and ending the session at $119.90 per barrel on the ICE Futures Exchange in London.

The strong showing from the US stock market served as a sign that economic growth in the nation, and subsequently the demand for crude, was on the rise. Promising reports from the nation’s housing sector also fuelled speculation that the domestic economy was in the midst of an active recovery. Traders took the news as a cue that a peak oil investment period is at play.

Optimistic financial reports out of the US overshadowed the mounting jobless rates that the nation has been struggling with over the past few years. However, general concern over unemployment kept a ceiling over the rise of crude oil.

With Iran’s nuclear program and the subsequent embargos out of the immediate spotlight, the US is more focused on its own financial state; and though the country seems to genuinely be in the state of recovery, it is difficult to predict if the optimism will last.

With several promising pipeline projects shelved until further notice, the nation again faces drastic overproduction and oversupply of energy, which could then spell a prolonged period of downturns for both oil demand and investments.

By Chris Termeer