Forex USD CAD

Rise in Crude Oil Signals Opportunity for Investors

An examination of the chart in the Forex market of the trading between the U.S. Dollar and the Canadian Dollar shows an almost free fall position for the value of the U.S. Dollar against the Canadian Dollar.

An inspection of the price of crude oil this week evidences the reason. Crude oil has reached a six week high and crossed the $50/bbl for a short time. The value of the Canadian Dollar is directly tied to the current price of crude.

Energy Investing

Every Wednesday there is an oil auction called the Brent Crude that determines the valuation for the oil produced around the world. This $50/bbl mark was reached by OPEC in March of this year on its way down and signaled cheaper gasoline for a world moving away from fossil fuels.

With this higher price for crude, “wildcatting” will surely increase. A “wildcatter” is a consortium that drills oil wells searching for that black gold. The term originated from an area known as “Wildcat Hollow” near Titusville, Pa. where oil was first discovered in America.

As the search for new oil supplies will increase and interest in drilling new exploratory wells will follow, there is news that CSX Railroad will no longer seek to improve its fleet of coal carrying railroad cars. The company intends to supply coal throughout the U.S. but this effort signals the demise of coal as a viable energy source in the United States of America.

Our world is following the model of the Global Village in which everything is connected around the world. With the rising price of crude oil, perhaps the desperate political and economic situation in Venezuela will ease.

Investors seem to be moving away from stock positions favoring the more stable bond market and one historically correct investor has moved away from the American Stock Market and into a safer hedge that of the price of gold. It is important to note that this savvy investor, George Soros, purchased an entire gold mine.

Investment opportunities are out there and this trend of drilling exploratory oil wells in the search for crude sweet oil offers an opportunity for investors. Those investors who wish to take a risk to make a great reward should investigate Energy Crowdfunding in the area of oil exploration as a way to hedge and protect their portfolio.

 

Sources:
CSX Wikipedia World Oil EnergyFunders