Occidental Petroleum Corp. has decided that it will purchase Citigroup’s Phibro business, a surprising move considering Occidental’s traditionally conservative leanings. Acquiring Phibro means that Occidental will enter the notoriously volatile world of oil trading, a market that brings great risk with the potential for significant rewards.
The company will pay $250 million for Phibro, its net asset value, allowing it to take advantage of Phibro’s several expert traders to help Occidental minimize risk and maximize reward as it begins to trade energy derivatives. Occidental joins a variety of other oil giants that have long been big players in energy trading markets, …read more

Despite the economy slowly and tenuously attempting to rebound from the depths it has reached, OPEC seems to be intent on driving oil prices higher and higher. At $63.45 a barrel, prices are already the highest they have been all year, but OPEC has said that it is considering a price somewhere between $75 and $80 a barrel.
A sharp spike in oil prices has been supported by OPEC but strongly condemned by many economic analysts. OPEC contends that it needs to drive oil prices higher in order to spur energy investments, but analysts tend to agree that a skyward oil …read more

According to the Group of Eight industrialized nations at the close of a meeting Rome, the world needs to invest in energy now in order to avoid the possibility of a surge in energy prices. Not investing in energy could slow down the recovery of the economy and damage our chances of prosperity in the future.
In their statements, ministers from the G8 and fifteen other countries concluded that the current financial crisis should not stand in the way of energy investment. Instead, countries that are able should make investment in energy one of their top priorities.
A handful of energy ministers …read more

A simultaneous increase in demand for oil on the part of China and wave of worry over the state of the US dollar resulted in the price of oil rising and the value of the dollar falling on Friday. For the most part, the rise in the price of oil comes off the back of the softening of the dollar.
Since oil is traded in dollars around the world, the value of the dollar and the price of oil are intertwined. The dollar continues to buckle under the burden of a huge load of debt and it suffers from analysts’ doubt …read more