Tuesday, June 26th, 2007
Alternative Energy: How Oil’s Unpredictability Is Driving Investment In Renewable Fuel Sources
The much-feared Nigerian Oil Strike turned out to be overblown – in more ways than one.
Investors had feared it would be a long work outage, and would cause oil prices to go higher. Turns out the strike was short, but that energy prices are moving higher anyway.
And that’s expected to further stoke investor interest in alternative energy investments, whose prices have been soaring over the past 12 months. Investors continue to believe that alternative energy investments will finally capitalize on their long-awaited promise, with conventional fuels continuing to rise in price.
Oil prices initially dropped by more than $1 a barrel yesterday – sending other energy prices lower, as well – after Nigerian labor unions ended a strike over the weekend. It’s easy to understand why the worries were so severe: Nigeria is Africa’s biggest producer of oil, and it’s also one of the top overseas suppliers to the U.S. market.
But the good feeling from the averted strike did not last long at all.
And that’s expected to further stoke investor interest in alternative energy investments, whose prices have been soaring over the past 12 months.
Interest In Alternative Energy Rising With Oil Prices
Concerns about refinery outages, growing demand for gasoline from U.S. drivers during the peak summer driving season, and demand from overseas caused those falling crude-oil prices to pull a sharp U-turn and head higher yesterday.
Fuel prices at the gas pump continued their fall, hitting an average of $2.978 per gallon, well below the all-time record of $3.227 set in late May, according to published reports.
But that’s not expected to last: Gas prices are expected to reverse course and head higher as vacation travel escalates.
No wonder alternative-energy funds have soared. For instance, the New Alternatives mutual fund (NALF) is up more than 35% in the past 12 months, while the Standard & Poor’s 500 and Dow Jones Industrial Average indexes are up a bit more than 20% during that same period.
A number of Exchange Traded Funds, or ETFs, focusing on alternative energy and new-energy technologies have been created over the past year.
How good an investment these will prove to be depends upon whose view of the future you believe.
Just last month, the American Council on Renewable Energy released a report that predicted renewable energy sources would have the capacity to supply as much as half this country’s current electricity needs and 40% of its fuel needs by 2025.
However, the U.S. government and some of the major refiners and utilities dismiss that forecast out of hand. They believe alternative fuels will provide, at best, 5% to 10% of the country’s needs by 2030.
Mathematical Concept Used by Gov’t Code Breakers Can Predict the Market’s Movement...
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And now for the first time, this strategy is being offered to a few investors as a reliable, emotion free guide to avoiding losses and making big money in these turbulent markets. See if you qualify, here.
