Seeking Alpha Portfolio App for iPad
Dividends & Income
View as an RSS Feed
Fadel Gheit: Gas Sector M&A About to Ramp Up
Mr. Gheit cites manipulation and speculation as the reasons for oil price increases. As oil continues to gush into the Gulf of Mexico, the reporter should have asked these questions:
1. Why is BP and other oil companies spending billions of dollars drilling a mile down to gather oil? Why is Devon investing in tar sands that have to be mined and heated before producing heavy oil? The obvious answer is that the supply of easy to find and produce oil is dwindling fast.
2. Why have the Chinese been buying oil assets around the world rather than investing in financial firms such as Mr. Gheit's Oppeheimer? At the same time, China controls the supply of essential minerals that are required to build batteries for electric cars, solar panels, and wind turbines. In the United States, government officials are discussing legal action against BP only months after opening up more ocean areas for drilling. While China takes action, meaningless calls for energy independence are tossed out by American politicians.
There undoubtedly was some manipulation during the rise of oil to $147 dollars a barrel but the Chinese seem to be favoring hard assets over other investment options. Should investors, burned by the financial engineering of American firms, do the same?
Jun 12 08:37 AM
Link to Comment
The Opinion Leaders
Xignite quote data
© 2013 Seeking Alpha