Revenue Objectives Int'l., LLC.

Petroleum is the most valuable commodity known to man. No economy can run without it. The primary benefit of petroleum is crude oil; which is then refined into the fuels that are the lifeblood of every major nation on our planet. Crude oil was first recommended by us in May of 2009. However, the vehicles for investors to participate in the opportunity were limited to risky futures and options contracts. By having the ability to own West Texas Intermediate and Brent Crude oil physically, investors can now profit from oil without the worry about time restraints.

WTI and Brent Crude should both be considered a strong buy as both India and China (half the population on Earth) are major buyers with limited production and refining capacity of their own. China, while having the facilities to extract and refine oil, find themselves needing much more than they can produce. This is similar to the United States, which imports oil from Canada and Mexico. The United States produces half of the oil it needs, and the remainder comes 90% from its neighbors to the north and south. China, is currently buying huge amounts of the commodity from Russia, and has entered into significant financial agreements and contracts on both crude oil and the refineries. Furthermore, China is making additional purchases of oil through intermediaries (including Mexico). As it is with many other commodities such as precious and base metals, China does not make full disclosure of its mining and purchasing activities. It is a nation that looks to the long term, is cautious and holds as much information as possible, as close to the vest as possible.

No commentary about Petroleum can be made without mentioning the key driver of oil prices; OPEC. OPEC is lead by Saudi Arabia, and, the Saudi Prince stated in June that they wanted crude oil to be no less than $80 per barrel.  Sources say they now are looking for prices to continue to rise well beyond current levels. What investors must understand about the crude oil market is that need and consumption is not predicated on price. Major buyers, those who buy oil in the true market of metric tons and tanker loads base their decisions on need only – price can and is passed along to the end consumer. In the case of the newest major net consumer of oil, China; its economic engine must be fed and will be, regardless of price. Its economy is still owned primarily by its government and those at the top of its political and military structure – and it is absolutely managed by them.
I expect to see the $100 per barrel level approached by year end (90 -120 days) to end of first quarter 2010 and a distinct possibility to attempt the $125 level within 12 months.

What must be understood is that oil prices are no longer simply dictated by the rise and fall of the US economy – and, the Chinese economy is becoming less and less dependent on US consumers each and every day. Oil has also become, de facto, a hard currency akin to gold and silver and in times of economic uncertainty becomes hoarded by those wishing to hedge their holdings against declining paper currencies and economies.