Investing and Global Finance News

Monthly Archives: August 2011

Will Gaddafi’s Departure Change Oil Prices?

Shokri Ghanem
Shokri Ghanem

As Moamar Gaddafi flees towards his twilight, the Libyan strongman has left his country in a state of turmoil, yet unlike other war ravaged countries, Libya has tremendous potential in oil wealth.  Between 2006 and 2010 Libya was producing on average 1,789.155 to 1,809.577 barrels a day. Of course this output has been halted due to the war.  But when oil production resumes it will help lower the price of oil especial Brent crude. In the past most of the Libyan oil was sold to Europe.  With Europe taking a front and center role in the war, there is no surprise that they will and probably already have struck deal with the rebels.  The question is how long it will take for oil production to reach pre-war levels.

“It will not be easy to start again at the same level,” Shokri Ghanem told Reuters Monday. “I think it will take a few months to come back to production, but to come back to the level of production that we used to produce it will take some time, maybe a year and a half.”

The real challenge will be to establish an emergency government to restore some sens of order to Libya. “They will probably enter a democratic process, but it will take a long time because they are not really prepared. They had no experience over the last 40 years with any type of parliamentarianism or democracy,” said Martin Hvidt, who derves as a Middle East analyst at the University Of Southern Denmark. “The danger would be that you would have an extended period when it is not clear who will be in charge.”

If that is the case it could take longer for the oil to come back on line causing an economically precarious situation in Europe to get that much more shaky.

Buy the Low Hanging Fruit

There are a lot of calls from investors to pick up some “low hanging fruit” in the market. While its true that you can find some potentially valuable stocks for cheap, there may also be a lot of duds.  The trick is to sift through and see if a stock is unnaturally low and will… Continue Reading

Airlines Flying Low

Due to Hurricane Irene, airlines have canceled about 9,000 flights all along the eastern seaboard, north of North Carolina. I don’t believe that the economic effects of this will be significant to the airline industry because travelers will still have to get home so they will fly a day or two later. But what is… Continue Reading

Hurricane Irene and Stock Market Sell Offs

In today’s world you never know how bizarre it could get.  Like some unforseen hand directing our country to catastrophe Hurricane Irene seems to be heading into downtown NYC before the morning bell on Monday.  Already investors have been uneasy about Ben Bernanke’s empty words coming this Friday.  Increased joblessness rates didn’t help and counteracted… Continue Reading

Bank of America: Is the Worst Over?

Yesterday’s trading saw a rebound in Bank of America (BAC).  The bank’s stock rose 11 per cent, or 69 cents, at $6.99.  So is the worst over?  Not quite.  Bank of America has been rumored to have a capital problem and the sell off that traders have witnessed didn’t just start a few days ago, but… Continue Reading

Jackson Hole May Put Us in a Deeper Hole

Investors are pinning their hopes on market salvation stemming from Bernanke’s address at Jackson Hole, Wyoming this Friday. Many people believe he will take the time to introduce QE3 since he used the same venue to introduce QE2 allowing markets to rise above their present levels. “As the week progresses, all eyes will turn to… Continue Reading