Recent discoveries in Brazil make now 'the time' to invest in oil
Date added: 28th November, 2008 at 13:47 (view all articles from November, 2008)
Categories: Natural Resources
Now is an excellent time for people to begin investing in oil - and Brazil is one of the main reasons why.
This is the suggestion of the latest Questor article - Investing in crude oil could be a slick move - in the Telegraph, which implied that the only place to go for oil prices in the future is up thanks to the belief that the majority of the world's resources have already been discovered.
Recent finds, such as those under Brazil's deep sea oil fields, are expected to be among the last ever and the cost of drilling such reserves makes it unlikely that oil prices will remain so low for long.
Oil is currently trading at about $50 a barrel, down from well over $100 earlier this year.
"This is a strong buy signal for oil," the article claimed, referring to a report from Goldman Sachs that suggested demand for oil is being artificially depressed by the credit crunch.
"A combination of fear, de-stocking and disruptions across the supply chain owing to frozen credit markets is currently depressing oil demand far below where underlying economic fundamentals would suggest," stated the analyst.
The idea that it is good to begin putting money into the oil sector right now was echoed by the Jamaican Observer, which placed investment in Brazilian oil giant Petrobras (PBR) at the top of its stock picks for the week.
It predicted that PBR's stock will "soar" once more details are revealed about its recent deep-sea oil finds, which are estimated by some to contain upwards of 100 billion barrels.
"PBR has had repeated luck with oil finds - so much that we can no longer call it luck but fate," stated the newspaper, as it predicted a bright future for company.
Oil was on the agenda this week when Brazil's president Luiz Inacio Lula da Silva met with Russian premier Dmitry Medvedev.
According to the Economist, Mr Medvedev revealed Russian businesses were interested in investing in Brazilian oil and hoped to take part in extraction of the natural resource.
This was in addition to him saying that he wished trade between Brazil and Russia to double in value from $5 billion to $10 billion in 2009.
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