Forex Worlds

Uncategorized May 16th, 2011

 

 

Online Forex trading is a popular and more profitable trading business. Every year this market keeps on changing, this is because the demand has been triggered by the purchasing power from consumers and traders.

To make the record straight, this 2011 the trading business will be much more higher. Imagine a market that has a turnover of $3 trillion everyday. What does that tell you? From my own experience it means this market is hot niche.

Forex trading is a market that if you know how to trade forex, then your financial status will change. This year has started on a high note in terms of currency exchange market. You have seen how the dollar has been strong against the Euro, Yen and GBP. This trend shows that if you trade the foreign currencies in a spectacular way, then you will be making profits.

For you to make profitable trades this year, I will encourage you to trade forex with the help of a powerful forex mechanical system trading tool. The reason why I am advocating for a forex robot, its because the said system will be of much help in deciding on what to buy or sell.

The benefits of the automated trading systems are;

- They can automate your trading task.

- They predict the market.

- They help in making decisions.

- They provide past and present data.

- They can trade different commodities such as oil or gold etc.

- Its plug and play.

The above benefits are just a few but the auto systems can really help you to make profitable trades. The reason why these Forex trading robots are helpful in trading foreign currencies, its because the system will go out to the market and bring the best trade and the best time to execute a trading task, then the software will come back and present you with the information that has been collected from the market. From that point you will decide whether to accept or reject. I hope you can see how these trading robots are reliable.

Another thing which will make 2011 a positive year in terms of forex trading, it’s the decline of the inflation. If you compare the past inflation which was triggered by the economy crunch its no more this year. The balance of payment between the importers and exporters is well balanced thus making the dollar and other currencies to be strong.

If you want to make more money via Forex trading review, then you should opt for forex auto money service that will help you make more residual income this 2011.
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Uncategorized May 16th, 2011

 

The year 2010 was largely influenced by the debt crisis and the second round of quantitative easing in the U.S.. These two factors are likely to remain on the radar of traders again in 2011. Will be added to them the possibility of slowing growth in China, which would be reflected in the power of commodity currencies.

Despite all the current problems with the disintegration of the euro area (so far!) Seems unlikely. The political will to keep together the euro area is still high enough to keep this incredibly difficult and expensive project alive. The European Central Bank has arrangements (buying bonds peripheral EU, enlargement of the European Fund for financial stability, increased financial assistance for the assistance of the IMF, the confirmation of the availability of funds in an emergency situation, etc.) that can be used not only for stabilization of the European bond market. Stabilization of bonds would then lead to the stabilization of the fall of the euro and possible korektivnímu strengthening. Korektivnímu because the amount of debt reduction and the rating of the euro area, along with warnings about possible further reductions will be aware of traders and prevents excessive strengthening. The overall outlook is slightly negative. Band for 2011: 1.3750 to 1.2500

Significantly expanding the U.S. policy in the years 2009 and 2010 helped to stabilize and subsequent recovery in GDP growth. Unfortunately, every coin has two sides: the expansionist policies aggravated the debt in the coming years will cause many problems.

In terms of U.S. $ will be the primary setters developments during 2011 the possibility of higher interest rates and the level of economic growth. Due to austerity measures and increased taxes in many EU countries can be expected that the United States will benefit from the growth of the economy before the EU’s lead.

Quantitative easing (QE) in the U.S. partly contributed to GDP growth and other fundamental indicators. Continued improvement of economic development would lead to the possibility that the Fed does not apply any money for QE. The discussion of such options would respond by strengthening USD.

As long as unemployment is close to the current 9.8% and inflation remains very low, the Fed ready to use all means and opportunities that will increase interest rates remain very low. Strong growth in U.S. $ this would not be likely. However, if an improvement in the labor market and increased inflation, the Fed could begin to signal a rate hike, which would turn the underlying trend and the possibility of a significant strengthening U.S. dollar. This option is not in the first half of the year probably. The overall outlook is positive. Band for 2011 to USD Index: 76.00 to 88.00.

On the currency market developments and in particular its volatility will certainly affect the development in China. China’s inflation is currently on a two-year maximum and the Chinese central bank increased the PBoC rate since mid-October the two. Further monetary policy tightening is likely and could have far-reaching implications. The higher rates of most stock markets react sale. Fall of the major stock indexes “Hang Seng” in Hong Kong “SSE” in Shanghai would certainly lead to falls of other world indices. The sharp fall of stock markets benefited from USD safe haven status, and Japanese investment is returned to Japan – JPY strengthens therefore, usually more than USD, so the USDJPY drops. Currencies of countries with higher rates such as AUD and NZD, which are traditionally used for speculative carry trade during the fall of stock markets weaken substantially.

At the risk of a “bubble” in the Chinese real estate market and bad loans of Chinese banks highlights a number of analysts have quite a long time. The risk of falling real estate prices are increasing every month and an increase in rates could be he a trigger mechanism that causes the bubble burst. In terms of risk “shock” that would cause a temporary high risk aversion is the development of China’s very important.

China’s economy is growing about 10% annually and imports huge quantities of commodities. When slowing down, the import of these commodities would be reduced. This would greatly harm the countries that export to China, particularly Australia and therefore the AUD.

When I mentioned Australia, I can not resist a few comments: house prices continually rising, and among the highest in the world. Australia during 2010 raised interest rates four times and generally a full percentage point. As a consequence of the increased number of mortgage defaults. Taking into account the above-mentioned risks, and also that based on the PPP is the Australian dollar overvalued by about 30%, I see no place for the AUD to strengthen significantly.

The Australian dollar is very sensitive to changes in risk aversion, so the signs extension / deepening of the crisis and the fall in stock markets would lead to large výprodejům. The risk that the repeated collapse similar to the one we saw in mid-2008 when AUDUSD over four months fell from 0.98 to 0.60 is probably not high, but depending on the trend of strengthening the AUD will continue indefinitely could be very dangerous. The possibility of disappointment from the development of the Australian economy seems to me very much and therefore I think that next year AUD closed at a lower level. Band for 2011: 1.0500 to 0.9350.

In the longer term are important for exchange rates of inflation, interest rates and GDP growth. But we must not forget the hard to define “market sentiment”, which may have a greater impact than short-term fundamentals. 2010 was a year of high volatility. Because of the potential risks (enlargement of the European debt crisis or even failure to pay bond investors, the fall of stocks and shares fall mainly in emerging markets, escalating tensions on the Korean Peninsula or in Iran, etc.). I’m very skeptical of the notion that 2011 will be a year of stabilization, security and low volatility.

Technical view:

Chart: Weekly, moving averages: 10 +50 +100 +200 SMA

The price is below 10, 100 and 200 SMA which can be seen as confirmation of a bearish trend. Price broke through the 50 SMA, but not yet above this average did not close. Even if the closure had occurred, the price of each lot of resistance, the outermost of which is headed downward trend line, which over the last maximum 1.4280. In the medium term will cost considerably easier to achieve at lower levels than at higher, because the support for 1.30 is the next support up to 1.25. The probability of achieving the level of around 1.25 I think it is in the medium term as high.

The situation on the USD index is in terms of moving averages are ambiguous. All four moving averages but grouped in a very narrow band, from which one can conclude that the early penetration of the zone occurs. According to the trend line heading up the breakdown should be to the north. Break in at 82.00 would be very important Bullish technical signals and the way to 88.00 it would not prevent the index.

 

“Correctly” ordered the moving averages confirmed a strong trend is Bullish. What is interesting in this graph, the distance between price and 100 or 200 SMA. This distance can be regarded as extreme and strategies based on a return to long-term average, therefore, suggest a lower value. Boring of the previous low or below 10 SMA can be seen as a bearish signal.

The situation for gold is very similar to the situation in the AUDUSD. Here we have sorted correctly confirming the strength of the SMA trend. The distance between the price and 100 or 200 SMA is really significant (26% and 46%) so that the average short-term retracement is likely. Break in the past the minimum or below 10 SMA is the minimum requirement for a signal marking a change in trend.

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Uncategorized May 16th, 2011

Trading the foreign exchange is never an easy task. As a single retail trader, you have to manage every bit of news and financial data and out-guess the “Big Boys” who run the show. It can quickly become an exercise of try to manage risks and searching for a strong trend to latch onto for an extended period of time. Losses are sadly inevitable, but if controlled, one good trend can offset several losing trades and offer potential profits. As the old trading proverb goes, “The trend is my friend!”

Beginning to trade in the Forex can be a very daunting task. There are possibly thousands of indicators designed to help traders read the market, but ultimately the problem for beginners is to understand the indicators and their functions. Not to mention trying to create a trading strategy from them. It’s like owning a fancy toolbox. Just because you’ve got the tools doesn’t mean that you’re a carpenter. The carpenter knows precisely which tool he will need for the task at hand whereas you’re left fumbling about. Similarly, manual trading is more or less for traders with a detailed knowledge of the market. Anything less and you’ll fumble along with the losing 90 percent of traders.

So what are the options? Some Forex veterans will recommend Forex signal services. These will send you constant updates on when and where to buy/sell in the market based on the indicators mentioned earlier. All you have to do then is initiate the trade that it instructs you to and hope it’s a winner.

As with any trading service, you’ll want to do your homework first. This is still your money we’re talking about here, so be sure you trust the service you’re signing up for. Check the past performance of that provider. Check the speed of signal creation, the methods of sending alerts, and their back testing results. Keep in mind that some of the higher-end services will have human traders analyze the signals, the lower-end ones will not.

Another option for beginners and experts alike is a Forex robot. Forex robot trading is a great way for a novice trader to explore the workings of the market without the prior education that the Forex generally requires. The robot works by receiving the Forex rate data from a feed in your trading platform. The robot then analyses this data and uses several inner checks to determine if a trade should be executed. The process is basically the same as what a human trader would do, but it’s all automatic.

Forex robots can analyze data much faster than a human trader, which means the robot can search for profitable trades and run trough thousands of scenarios before you could even consider running a trade. There are some Forex traders with years of experience that can consistently outperform a robot, but for most traders, the robots just have too much processing power.

There’s always a downside, of course, and with Forex robot trading it’s just the sheer quantity of them available. Be aware, most of the robots offered online are worthless and will be losers. It seems that everyone and their mother have designed a Forex robot, but only a relative few actually work. As with the signal services, be sure you trust what’s trading your money.

Uncategorized May 8th, 2011

Introduction

The political and economic structures of the Arab Gulf countries have been surprisingly resistant to change. The resilience of the “old political deal” between royal families and traditional elites–the ‘ulema’, tribal leaders, urban merchants and technocrats–can be attributed to three main factors. First, the institutional, tribal and commercial prominence of the traditional elites meant that they have been able to “deliver” popular support to the ruling families. Second, the Gulf monarchies have been able to shift from dependence on domestic groups for military protection to a dependence on foreign states. Treaties and military cooperation with the US and Britain have protected them against land or resource grabs by their larger and more populous neighbors. Third, oil revenues–the means to finance patronage–have held the system together (Boyd).

In order to ensure the efficient distribution of these oil revenues, the ruling families have created state institutions. Government expenditures as patronage have flowed one way, while loyalty to the royal family has flowed in the opposite direction. The size and nature of the oil revenues have had other important consequences. They have given the ruling families of the Gulf much greater economic power than taxes could ever have produced. Massive state spending has made Gulf populations dependent on government-financed social programs. Moreover, because oil revenues are external to the system, they have made the ruling families less dependent on other social forces in each country than they had been before the development of the oil sectors. Finally, new state institutions have strengthened internal security, while oil revenues have given the Gulf states the means to buy external protection .

The “old deal” is being undermined on several fronts. The traditional elite is losing its effectiveness as urbanization and the emergence of large welfare states have diminished their authority. More importantly, the financial resources which hold the patronage system together have dwindled as revenues have been stagnant over the past several years (Mohammedi 185).

There is a widespread recognition in the Gulf that the status quo is unsustainable. Piecemeal attempts to shore up the political and economic system through selective reforms will prevent radical changes. They will not, however, prevent a gradual weakening of the economic power of the state and with it the ruling families. Moreover, the reforms will gradually increase the influence of the private sector, particularly if it is successful in securing strategic footholds in areas where the state has so far reigned supreme (185).

To prevent this shift in relative economic, and ultimately political, power in the Gulf, the ruling families will have to increase oil revenues substantially in a short period. This is unlikely to happen because world oil markets have become a hostile environment for Arab Gulf producers. Oil prices have never recovered from the 1985-86 crash and Arab Gulf oil producers have lost the “market share battle” (Mohammedi 179). In the short run, even small supply increases from non-OPEC and OPEC countries will force Arab Gulf exports to remain at current levels. Over the long run, huge increases from Iraq and the Central Asian states may rob Arab Gulf producers of the increments in increased global demand they thought would accrue to them (179).

The smaller Arab Gulf countries, notably the UAE, Qatar and Oman, have reacted to stagnating oil exports by investing in gas production and exports. The larger producers, however, have lagged behind in gas development either because of a lack of gas reserves (Kuwait) or available financial resources (Saudi Arabia). The development of Saudi Arabia’s gas resources is inevitable given its enormous appetite for electric power, desalinated water and petrochemical feedstocks, all of which require gas inputs. To do so, however, it will have to allow private firms (Saudi and foreign) to enter this strategic sector of the economy (179).

Developing gas is fundamentally different from oil and has important domestic political implications. Private sector involvement is needed, whether foreign or domestic, to meet capital costs, to provide technological expertise and to help secure markets (Turner). With this involvement comes exposure to international standards of financial accountability, forcing a curtailment of wasteful government expenditures. Moreover, because the payback period for gas projects is longer than for oil projects, global investors will continue to scrutinize this sector well into the future (perry).

Global Oil Markets

When oil prices crashed in the mid-1980s, producers with a longer term outlook argued that demand would rebound in the industrialized West and grow rapidly in the industrializing East. Moreover, they believed that high-cost oil producers that had flooded the market in the early 1980s, undermining international prices, could not sustain their output at lower prices and eventually would have to cut production (“Islam and Oil Policy”). The large Arab producers hoped that these developments would provide them with an ever-increasing share of global demand.

In 1988, the collapse of the Soviet economy led to nearly a five million barrel per day (b/d) decline in its crude oil production. In 1990, the international embargo on Iraq after it invaded Kuwait led to a decline of nearly three million b/d in crude oil on world markets. But, even these two market-rocking developments did not help large Arab Gulf producers preserve their market share. Saudi Arabia was able to make up for part of the reserve loss by raising its output by three million b/d. Kuwaiti output, also knocked out by the UN embargo and later by Iraqi sabotage, rebounded to two million b/d in the early 1990s, nearly 700,000 b/d higher than pre-invasion levels. Adding small increases by the UAE, Qatar and Oman, the Gulf has hiked its output by 4.8 million b/d since 1988. The region, therefore, only took one-third of the incremental demand increases of 12.1 million b/d between 1988 and 1996 (“Where Trade and Competition Intersect.”).

The remaining demand was met by two major sources: non-OPEC producers, particularly the North Sea, and other OPEC producers, namely, Venezuela and Algeria. A combination of technology and better terms offered by the UK and Norway have kept North Sea crude oil output rates rising.2 Developments within OPEC are more interesting. In response to domestic financial constraints and given the prospect of falling oil production and revenues, some of the poorer OPEC countries invited foreign multinationals back to assist in raising domestic production capacity. More than the intra-OPEC rivalries over production quotas and prices, this was the most serious threat to an organization created to provide a united front against the major international oil companies. By the early 1990s, it was clear that the non-Gulf OPEC members saw their future outside the organization, particularly since Gulf producers dominate OPEC and often block OPEC-mandated market share hikes for the smaller, more financially constrained producers (“OPEC in Review”).

Algeria was one of the first OPEC member states to change its foreign investment law. Despite the worsening political situation, the large unexploited oil and gas resources in the south lured a large number of foreign companies to invest in Algeria. An even more threatening move was made by Venezuela. With little fanfare, Petroleos de Venezuela (PdVSA) pushed through a phased domestic restructuring program allowing for the reentry of foreign oil companies. With new capital flowing in for the first time since the nationalizations of the 1970s, the company was able to invest in refining capacity in overseas markets. By 1997, PdVSA had become the largest refiner in the US through its ownership of CITGO. It made similar moves into the markets of other South and Central American countries (“OPEC in Review”).

World Market Shares

Even though they are linked through information networks that communicate jitters, world oil markets are quite segmented by region. Countries in the Atlantic Basin (including the Mediterranean) and the Asia/Pacific regions are all net importers of crude oil. The Gulf is the major exporting region in volume and until recently had been able to “swing” between Asia and the Atlantic/Mediterranean. In the late 1980s, Arab Gulf countries expected that steadily rising energy needs in both regions would increase demand for Gulf oil. Increased demand in the Atlantic Basin however was met by suppliers in the North Sea, Venezuela and Colombia. In North America, PdVSA’s purchases of refineries created “dedicated buyers” of Venezualan crude and effectively shut out crude originating in the Arab Gulf (Pipes).

This left the Arab Gulf producers to concentrate on expanding their share of the Asia/Pacific market. Rapid economic growth and policy changes in Asian countries–particularly India and China–led to an enormous increase in petroleum product consumption, much of it met by Middle East supplies. Fine tuning supply according to specific domestic needs, however, requires that refineries be closer to the consumer than the producer. Asian policymakers, therefore, have determined that Asia will need to add nearly five million b/d of new refining capacity to meet rising demand (Campbell).

Arab Gulf producers view these new Asian refining needs with great interest. Buying into or building stable and protected markets from scratch could secure for them a situation similar to that of the Venezuelans in North America and minimize competition for markets from Iraq (when the UN embargo is lifted) and the Central Asian states (once export pipelines are built) (Campbell).

Kuwait had been eyeing Asian refineries after having developed an extensive network of refineries and gas stations in Western Europe under the brand name Q8. After the Iraqi invasion, however, the Kuwait Petroleum Company was forced to divert funds earmarked for Asian investments to rebuild the domestic oil sector. In the early 1990s, with Kuwait and Iraq temporarily out of the crude market, Saudi Arabia rapidly picked up several pieces of Asian refining capacity, namely a portion of the South Korean refiner Ssangyong and outright ownership of the Petron refinery in the Philippines. Saudi Arabia’s attempts, however, to secure parts of the Japanese refining industry–the real prize–failed, mainly for political reasons. Likewise, it was unable to gain a foothold in China because Sinochem, the government refining company, demanded that Saudi Aramco pay for substantial social benefits for workers currently supported by the Chinese company. In other Asian countries such as India, subsidized domestic prices which render refining projects unprofitable, have discouraged the Saudis and Kuwaitis from investing. As of mid-1997, despite many announcements of Saudi, Kuwaiti and Omani joint-ventures or investments in the Asian refining sector, no solid deals were in the offing (Mohamedi 185).

The pressure to secure market share for the Gulf Cooperation Council (GCC) producers will mount in the next several years. Their greatest competitor in the long-term is Iraq. On the eve of the invasion of Kuwait, Iraq was pumping just over three million b/d. After the Gulf War, its output fell to around 600,000 b/d, sufficient to meet domestic consumption and a trickle of exports to Jordan and Turkey. Since December 1996, Iraq increased its exports under UN Security Council Resolution 986, which makes provisions for Iraq to sell $2 billion worth of oil to pay for food and medicine imports after deducting reparations and other payments (Mohammedi 179).

This “humanitarian oil” was relatively easily absorbed into the Mediterranean market early in 1997. In what may be a dress rehearsal for the “bigger” return of Iraqi crude to the market, international oil prices fell some $4 to $5 per barrel when Iraqi supplies returned to the market. Moreover, Arab Gulf countries were once again restricted to producing at levels they agreed to nearly three-and-a-half years ago at the March 1994 OPEC meeting. Once sanctions are removed from Iraq, it is not inconceivable that that country will be able to produce around three million b/d almost immediately and export nearly 2.5 million b/d once port facilities at Um Qasr are upgraded or rebuilt. Most of that crude will flow into the Asia Pacific region and encroach upon Arab Gulf market share (“Where Trade and Competition Intersect”).

Competition for the Arab Gulf countries will also come from the large oil producers of Central Asia and the Caucasus, once they develop export routes to world markets. This is unlikely to happen very soon. Russia has actively blocked exit routes from Azerbaijan and Kazakhstan (the two largest potential oil producers of the region) through its own territory and through Armenia and Georgia to Turkey. The US has effectively banned US oil companies from investing in Iran and threatened non-US oil companies with sanctions if they build oil or gas pipelines through Iran, the most logical exit route to the Asia/Pacific region (Diwan).

Beyond the next five years, however, it is quite conceivable that Central Asian and Iraqi oil will reach Asian markets, which could force the Arab Gulf producers to limit their own production. Saudi Arabia in particular could attempt to increase its market share by raising output, thereby abandoning its role in global oil markets as “swing producer.” This could be dangerous for the kingdom because it could mean having to live with lower oil prices. Although the actual production costs for the Gulf producers may be extremely low by international standards, if the socioeconomic costs of maintaining an economy so dependent on oil revenues are factored in, these countries become very “high cost” producers. Fears that an economic meltdown would result from a rapid fall of oil prices have restrained Arab Gulf countries from aggressively pursuing higher market shares (Mohammedi).

In the medium to long term, since Gulf economies are unlikely to reduce their dependence on oil revenues, cautious economic policies will most likely restrain them from raising oil output. This means stagnant oil revenues in nominal terms, falling oil revenues in real terms and therefore a continued slide in oil expenditures per capita. The reduced direct contribution of the Arab Gulf states to the incomes of their citizens will decrease the ability of the ruling families to maintain political loyalty (“End of ..”).

Gas Development

Given the dim prospects for raising oil revenues in the medium term, several Arab Gulf countries have embarked on ambitious gas development projects to diversify their export earnings. The UAE was the first to invite foreign gas companies to build its Liquid Natural Gas (LNG) facilities in the 1970s and was followed in the 1990s by Qatar, whose LNG shipments to Japan started in 1997. Shell is building Oman’s LNG facilities, while TOTAL is setting up Yemen’s LNG export program .

The economics of gas development are different from oil development. Gas development requires substantial capital outlays mainly because of the need to develop distribution and export facilities (liquefaction units and/or pipelines). Given these capital costs, the period before projects begin to generate net revenues can be long. Once they begin, however, the income is steady–like a long-term annuity–unlike oil revenues which peak rapidly and then decline as production falls. Because of the high capital costs and long gestation period, such projects require substantial gas reserves and creditworthy customers who can pay for the gas over the long haul.3 The capital costs associated with gas development have proven prohibitive for some of the relatively poorer Gulf governments (namely Qatar and Oman). As a result they have had to open up channels for multinational investment .

Investment in gas development may produce unanticipated sociopolitical consequences. Large foreign investments have exposed these countries, for the first time, to international credit assessments. In order to “live within their means” governments must cut expenditures, which strikes at the heart of domestic politics. Just as important, especially in Saudi Arabia, gas projects have opened up the hydrocarbon sector to the prospect of domestic private investment. Large Gulf companies with substantial capital resources are angling for a stake in a sector that has traditionally been out of bounds to them. Although not likely to affect significantly the smaller Gulf countries, it will become a major factor in Saudi Arabia (“Where Trade and Competition Intersect”).

In strictly economic terms it might be easier for the Saudi government to invite foreign companies in, as Shell, Agip and other multinationals are suggesting. Three factors, however, are likely to lead to Saudi private sector predominance. First, inviting foreign firms back into the kingdom without the participation of the domestic private sector could constitute a major political embarrassment for the government. Second, the private sector has not enjoyed significant lucrative opportunities since the boom years of the early 1980s. Projects of this sort will be a major bonanza for a key constituency of the ruling family. Moreover, from an economic point of view, the repatriation of private capital it will produce will boost the balance of payments and the overall economy (“Where Trade and Competion …”. Third, there are a number of new Saudi oil and gas companies that are joint-ventures between merchant families and members of the royal family. These companies have invested in hydrocarbons in Yemen, the Central Asian republics and elsewhere. They view the opening of the domestic gas sector as an excellent opportunity to turn political connections into commercial success. Nimr and Delta, two such companies, are lobbying for the opening of the gas sector, while other major companies are gearing up to participate in the “bonanza” (“where Trade and …”).

The idea of the “upstream” gas sector being opened up to private capital is still considered radical in the Gulf, especially in Saudi Arabia. Recent developments in the power sector, however, do point in that direction. The Saudi industry and electricity minister recently reclassified power generation as an industrial activity,4 thereby opening up enormous investment opportunities for private sector firms. It is logical that the next step in this process of denationalization will begin “downstream”–power generation in the gas value chain–proceeding to “midstream” pipelines and gas distribution and finally all the way “upstream” extracting resources from the ground. The latter is the most lucrative part of the gas chain and the most coveted by the private sector (“Oil”).

Changes in the international oil and gas industry do not portend radical shifts in political power in the Arab Gulf states. A gradual transfer of economic power, however, from financially constrained states to their private sectors, which will gain control of key economic sectors, will ultimately mean a broadening of the political system. In the short run, this does not translate into popular politics. It does, however, point to oligarchical rule rather than the monopoly the ruling families of the region enjoyed after the rise in oil prices during the early 1970s .

Need for Arab Economic Unity: Oil Power

A number of oil-rich Arab countries (notably Saudi Arabia and the Gulf states) drive around 90 per cent of government revenues from oil and have high per capita incomes but a limited industrial base. Other states with oil resources have encouraged industrial diversification, usually within a framework of rigid state control (Maeena “Arab Industry’s …” 5). The major Arab countries without extensive oil reserves  depend on industry and agriculture (6). All Arab countries import significant volumes of industrial and transport equipment and technical services (6).

The region has a very small manufacturing base and depends nearly entirely on foreign imports to sustain an increasingly high-tech urban society. Nor does the region have a sustainable agricultural base, making imported food and chemicals critical to survival. Locally produced capital goods are virtually nonexistent and transport, communications, power generation and distribution, water purification and distribution, and construction equipment must all be imported. Health care suppliers and equipment, automobiles, aircraft, spare parts, hospitality-industry supplies and equipment, and building materials are other excellent prospects for Western exporting to the region (Maeena, “Arab Industry’s …” 9-11).

Maeena states that:

‘We in Arab world always express satisfaction at the state of Arab industrial output. But while advances have certainly been made in some sectors, many others within the Arab world lag far behind those of other Asian countries, let alone Europe or the Americas… What is required is a sincere and honest critique of our present position, and also the creation of research centers. We have had enough of gigantic airports and monstrous shopping malls filled with imported goods. We must focus on the much-needed and highly relevant technology industries that will ply such vital roles in the next century. We cannot afford to be lax any longer’ (Maeena, “Arabs Lag…” 6-7)

However, reviewing all attempts of cooperation, alliances or integration among Arab or Islamic countries in the last four decades we find big projects at the beginning and very little or nothing was left at the end. (Maeena, “Arabs Lag …” 11-12).  Some of these projects are (Source: Maeena, “Arabs Lag …” 12-13):

1. The emergence of new centers of development and investment finance;
2. Arab fund for economic and social development
3. Kuwait Fund for Arab Economic Development
4. Abu Dhabe fund for Arab economic Development
5. Council of Arab Economic Unity
6. Gulf Cooperation Council (GCC)
7. Arab Bank for Economic Development in Africa
8. Arab Maghreb Union: Algeria, Libyan, Mauritania, Morocco, Tunisia (AMU)
9. Arab Monetary Fund (AMF), 1976
10. Arab Trade Financial Program (ATFP)
11. Arab Common Market, 1964
12. Arab Free Trade Zone

Of course, we can not exclude the possibilities of achieving some success for schemes of partial economic integration on a limited scale, say between some regional countries such as GCC Maeena, “Arabs Lag …” 12). Fortunately, the Gulf countries, led by Saudi Arabia, have realized the importance of creating a free trade bloc. Even more importance the reforms undertaken by the Gulf countries to strengthen their financial systems and diversify their investments in other resources besides pure oil production (12). Even though these steps are considered small when compared to other non-Arab countries, they are a step forward. The next important move is to focus on creating the regional trade zone. It is going to be hard, but evidence is ample that free trade zones are growing even among the world’s poorest countries, as in South America and Africa, despite their existing political problems. An even bigger trade region could also be formed with other non-Arab Asian or European countries to create a stronger alliance with a GDP big enough to support the members competency against other trade economic blocs “Where Trade and Competition Intersect” 59-61).

Indeed, Arabs have all now woken up to certain basic realities. All of them have realized the fact that the world has been transformed into economic blocs which carry political weight. They are even at last admitting the failure of political and military cooperation. In the same way, they have realized that the idea of the Arab Common Market forgotten by themselves has become a focus of interest to others who have proposed a Middle East Market according to Western perception of it (“Where Trade and Competition Intersect” 63-64).

Libyan leader Moammar Gaddafi has several time calls for Arab political, economic unity and argues that his country would open its borders to the other Arab countries to enhance the social and economic relations among the region and to cooperate to achieve the social, political and economic stability. President Mubarak of Egypt stresses the importance of Arab countries achieving an Arab economic bloc operating in a world order based on balance and equality. The Emir of Qatar emphasized the importance of comprehensive development through regional cooperation and integration (Maeena, “Arabs Lag …” 15-16).  The recent progress achieved by some of the Arab countries in forwarding economic reform, strengthen the role of the private sector and increasing the industrial products will contribute to the success of the expected agreement of the Arab Free Zone. It is not expected that all the Arab countries will sign the agreement, due to the disparity between economic systems in the Arab world. Those countries that are going to sign the agreement are the ones that have achieved more progress in economic reform programs. The other countries will be able to sign later, which will help develop the bilateral economic relations between the Arab countries (16).

The problem with the Arab common market has never been a theoretical one. Sudan could be the bread basket of the Arab region, the Gulf its oil reservoir, Egypt its labor force, Syria its farm and Morocco a great market. All these were and still are known facts. But what has been missing is the plan, the determination, and the operationalization of that plan (Maeena, “Arabs Lag …” 16). And they are still missing. The mutual trust, commitment and the spirit of cooperation are also missing. Increased commerce and investment among the Arab countries will diminish the mistrust that has long divided governments prevent private sectors from working together for their mutual benefit and that of other societies (17).

The economic independence or interdependence in form of cooperation and integration instead of merely competition, is the today’s most important issue for Arab prosperity and development.  Although there is a great interest for Arab cooperation and integration, it would be quite unrealistic to talk about immediate successful schemes for economic integration among Arab  countries. Some reasons are the greed of many Arab nations in becoming the leaders in every thing without realizing their areas of strength and weakness, the high illiteracy rate of many Arab countries, and the territorial disputes between many Arab countries which result in conflicts that interfere with economic planning. The example of Arab common Market is quite enough in this respect. If Arabs like just to talk about their dreams and hopes without taking serious actions towards first rearranging and rebuilding the Arab house from the inside, they will never face up to the challenges posed by the GATT, nor will they survive competition from regional blocs.  It is in view of this that the greater percentage of nations are integrating and cooperating, but the Arabs remain fixated on their differences, at the expense of their economic future.

Oil and Anti-Arab Stereotypes: Implications

This inability to separate stereotypes from reality determines both American foreign and economic policy towards Arabs.  The American media  always explains increase in the price of oil by referring to greedy Arab nations who are trying  to control the world’s natural resources.  Thus, the world sees OPEC as being Arab while only 7 of its 13 members are Arab.  Furthermore, of the five largest oil-producing countries, only one is an Arab nation, Saudia Arabia.  This is supported by statements such as “the world’s supplies of oil and price levels are manipulated and controlled by greedy Arabs” made by an Editor of The Washington Post (Ghareeb, 22).  That is, the media actually supports its stereotypes with direct lies.

The negative image of the Arab individual is strongly emphasized in American movies and television serials.  As Shaheen argues, television is an even more powerful creator of negative stereotypes than newspapers are.  That is, “television has the ability to enlighten and enrich the lives of all the people it touches, however, it also has the ability to perpetuate and create stereotypes” (39).  In an analysis of television shows, Shaheen demonstrated that there were four basic images of the Arab individual,  “They are all fabulously wealthy, they are barbarians and uncultured, they are sex maniacs with a penchant for white slavery, and they revel in acts of terrorism” (39-40).

A stereotype is dangerous because it completely erases any real understanding of a people and culture.  People who believe that the Arab stereotypes they view in the media are true, are totally convinced that they have an absolute and truthful understanding of Arabs.  If this understanding is examined, it turns out that Americans have the following image, ” Arabs are buying up America.  OPEC is synonymous with Arabs.  Iranians are Arabs.  All Arabs are Muslims.  Arabs are white-slavers and uncivilized rulers of kingdoms.  All Palestinians are terrorists.  And Arabs are the world’s enemies” (Shaheen, 19-20).  As Arabs, we know that these images are totally false and are not even based in reality.

Stereotypes go beyond the Arab as a people to include the Islamic religion.  To explain Islam to the American people, the media portrays images of Muslims as “belonging to a faith of 800 million people, consisting of strange, bearded men with burning eyes, hierarchic figures in robes and turbans, blood dripping from the striped backs of malefactors, and piles of stones barely concealing the battered bodies of adulterous couples,” according to Godfrey H. Jansen, an expert on Muslims, in his book, Militant Islam (Shaheen, 35).

It is easy to lay the whole blame for negative Arab images in America on the US mass media, but this is not a fair conclusion.  Actually, the majority of the blame must lie with the Arab media who do not address the West at all, and do not correct the false and harmful images which are spread as absolute truths and realities.  The Egyptian media, among other Arab medias, should begin to address these stereotypes.  The point is that they do discuss anti Arab stereotypes in daily newspapers and magazine, and they do argue that they are false and incorrect but, they do so for their Egyptian readers.  That is they do not address the West and the United States in their own language.

As regards Islam and the manner in which it is becoming more and more related to terrorism, to the extent that many in the United States hate, and fear, both Islam and Moslems, the Egyptian media ought to play a role in illustrating the true Islam.  They must explain the religion, show that it is not a violent one, and argue that the actions of any Moslem terrorist does not represent Islam.  This will take a great deal of effort and will require a well-studied media campaign but, it must be done.

Bibliography

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“A Discussion With Bernard Lewis.”  Middle East Quarterly.

Alter, Jonathon. (1995, May 1) “Jumping to Conclusions.” Newsweek, 125.  1st May 1995.  55.

Bazzi, Mohammad.  “The Arab Menace.”  The  Progressive, 59.  August 1995, 40.

Barfield, Claude E.  “More Than you Can Chew?: The New Dispute Settlement System In the World Trade Organization.”  November 15th, 1999.

Boyd, D. A. “Radio and Television Research in the Middle East: Why Don’t  Arabs do it?”.Communications, 13, 1987. 13-28.

Campbell, Colin and Jean Loherrere.  “The End of Cheap Oil.”  Scientific American.  March 1998.

Diwan, Roger.  “Iraq, North Sea Will Destabilize the Market’s Fragile Balance.”  Arab Business and Investment Journal.

“Diversification of Sources of Income.”  Washington Insight.

Dobkin, B. A. “Paper Tigers and VideoPostcards: The  Rhetorical  Dimensions of Narrative Form in ABC News Coverage of  Terrorism.”  Western Journal of Communications, 56, 1992.  143-160.

Enrickson, Thomas.  “The Rise and Decline of Rogue States.”  Journal of International Affairs.  Spring 2001.  54, 2.

Ghareeb, E. Split Vision: The Portrayal of Arabs in the American Media.  Washington, D.C. American-Arab Affairs Council. 1983.

“Islam and Oil Policy.”  //<http://www.petrofinance.com>

Kressel, N.J.  “Biased Judgments of Mass  Media: A Case Study of the  Arab-Israeli Dispute.” Political Psychology, 8, 1987.  211-224.

Kunst, Bob.  “Boycott Arab Oil.”  The Way to Protect America.

Leipoid, L. E.   Folk Tales of Arabia. Minneapolis: T. S. Danson &  Company,  Inc., 1973.

Maeena, K.  “Arabs Lag Behind In International Trade.”   Arab News.  April 1st, 1997.

Maeena, K., Arab Industry’s Sorry State.  Arab News.   September 2nd, 1997.

Mohamedi, Fareed “State and Bourgeoisie in the Persian Gulf,” Middle East Report 179.

Mohamedi, Fareed. “Saudi Arabia’s Crunch,” Middle East Report 185.

Middle East Economic Digest (MEED), September 12, 1997.

“NEW OIL PRICE SHOCK SEEN LOOMING AS EARLY AS 2000.”  Wind Energy weekly.  15, 684.  12 Feb 1996.

“Oil Glut and the Economic Downturn.”  30 Aug, 2000.

“OPEC in Review.”  Socialism Today.  51.  Oct 2000.

Pipes, Daniel.  “The Curse of Oil Wealth.”  The Atlantic.  July 1982.

Perry, George L.  “The War on Terrorism, the World Oil Market and the US Economy.”  Analysis Paper 7: America’s Response to Terrorism.  24 October, 2001.

“Politics, Oil Are Married in the Region.”  The Wall Street Journal.  10/13/2000.

Shaheen, J. G.   The TV Arab.  Ohio: Bowling Green State University  Popular Press. 1984.

Shipler, D. K.  Arab and Jew: Wounded Spirits in a Promised Land. New  York: Penguin Group. 1986.

Turner, Thomas.  “Overview of Self-Determination Issues in Africa.”  Self Determination in Focus.

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Willis, Clint.  “Funds: Investing in a Time of Crisis.”  Reuteurs.  09.20.01.

Winston, Emanuel.  “The Decline of Arab Oil Power.”  Winston Mideast Analysis and Commentary. 20 June, 2000.

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(ArticlesBase SC #4573233)

Uncategorized May 8th, 2011

Nigeria though the sixth largest exporter of crude oil in the world, remains one of the largest importers of refined petroleum product in Africa, consuming about 1.2 billion liters in 40 days due to vandalization of oil distribution pipeline and the poor state of our local refinery in the country has greatly affected the capacity of the local industry to meet the demands of consumers in terms of refined petroleum product like AGO, PMS and DPK.

In order to receive, store and re-distribute these products to the end users, tank farms are required to take the product from the vessel from there offshore position into the tank farms for temporary storage through pipes. These facilities are very good for companies buying products like AGO,PMS and DPK from offshore ,the facilities are well equipped to handle large volume of product pending when loading is done on trucks and tankers.

The oil and gas market in Nigeria is large, expanding and sustainable and the provision of tank farm services is one of the lucrative aspects of the industry.
The provision of petroleum storage services cost as much as between N3 – N5 /liter for 24 hours.
The investor can choose to build the tank farm from scratch or acquire the property from owners though this option is very rare. The investor can also lease the facility for a long period of time from the owners.

Some of these facility builders took loans from bank and are seeking for interested buyers willing to purchase the facilities from them so that they can clear-up there bank loan and make some profit in the process.

The facility are usually valued based on there location, storage capacity and the size of the land the facility is sitting on.

(ArticlesBase SC #3924313)

Uncategorized May 8th, 2011

The Turbo machinery Symposium of this year is to be held on October 4th till 7th, the presence of all the equipment manufacturers and service providers linked to the company is made mandatory. The Turbo machinery Symposium is conducted at the George R. Brown Convention Center in the Houston and the aim of the symposium is to discuss on the increased spending rate in the Oil and gas industries sited in the North America. The Power projects worth $77 billion in Northern part of America is to commence this year an initial payment of $32 billion was sanctioned for this project last year.  Shane Mullins, the vice president for Industrial Info for global enhancement declared that, there is mad clash for funds among the renewable energy developers since the current year 2010 comes to closure, and the American Recovery and Reinvestment Act of 2009 will grant funds.

 

The American Recovery and Reinvestment Act will assign cash depend on the renewable energy plans and they will allocate till the year 2010 or it may extend till the next year. Shane Mullins hoped that the aim of the Turbo machinery Symposium will be on the wind turbines and the combustion turbines, which plans to produce 8,000 megawatts of wind power each year till the next three decades. There will be major examination on the combustion turbines and the natural gas construction will be enhanced and it produces plethora of business opportunities. Jesus Davis, Industrial Info Resources vice president declared that $14.6 billion was separated for the construction of the Oil and Gas projects.

 

Many Oil manufacturing companies like BP Plc and OAO Gazprom are competing to explore the wealth in the Arctic region; this is supported by Canada, Russia, United States and Iceland. The exploitation of natural gas and oil in the Arctic region may lead to war or it may change the catastrophic climate, so it is not much wise to dig the North Pole frozen lands. According to the latest reports declared by the BP, it unveiled that the arctic region contains vast untapped oil and gas resources, and it estimated around 200 billion barrels of oil can be explored from this region which contributes around 50 percent of the total hydrocarbon in the world.  The recent disaster in the Gulf of Mexico has reduced the zeal of the BP, but if they are not ready to explore the resources other challengers will explore.  The arctic region is not only a source of natural resource, but it also provides a transport route between Europe and Asia and reduces the transportation cost and time.

(ArticlesBase SC #3384803)

Uncategorized May 8th, 2011

For the first ever commercial oil spill that one can recall is the incident when the tanker Torrey Canyon ran aground off Cornwall on March 18, 1967 in the United Kingdom spilling 80,000 tones (119,000 barrels) of crude. Though this oil spill happened way back in 1967 the scenario today is also pretty much the same. Though the recent , Gulf oil spill and the Singapore tanker oil spill may not entirely be caused by the vessels, it just calls our attention to the very notable fact, pollution from vessels.

According to a report released in 1980, of the 3.2 million tonnes of oil released into the ocean, almost half of it was from vessels. This estimation will help you get an idea on how grave this issue is. Accidental oil spills from tankers and commercial vessels, deliberate or operational discharges from commercial vessels, grounded and abandoned vessels are some of the most common.

Vessels also play a significant role in increasing global warming as over 90 percent of the global trade is carried through ships. It is estimated that ships in particular would be accountable for about 40% of the air pollution over land in addition to the 3.5% to 4% of all climate change emissions.

Discharge of ballast water when loading and unloading of cargo near the port is a major reason for pollution near the coasts. Apart from contaminating the sea with tar balls the ballast water also threatens ecology by introducing foreign species of organisms into the water. The discharged water also contains human effluents which when released can cause serious damage to the environment.

One simple method that can minimize marine pollution to a great extent is the usage of eco-friendly bioremediation product like Oil Gone Easy S-200 to clean the oily bilge water and immediate oil spill remediation in case of accidental oil spills.

(ArticlesBase SC #2759328)

Uncategorized May 8th, 2011

Crude is one of the most important commodities purchased by all the countries around the world without exception. Due to its characteristics and ability to fuel economy and growth of a country it has become the most sort after thing in the modern world. Right from a common man and to most advanced institutions of a country each one has its share of requirement to consume oil. Most of the countries in world have to depend upon imports to meet their requirement of crude. Crude price are controlled by international demand and supply mechanism and is bound to fluctuate. While preparing budgets for a country often normal variance of oil fluctuation is considered and if prices are held between this variance it does not affect the planned growth prospects of the economy.

In fact there can be events happening around the world which can bear direct influence on the crude prices and they can go for an unprecedented rise or fall. Current political crises in Middle East had lead to a sudden increase is oil prices. Not only prices are high and expected to go even higher there are growing concerns on even receiving safe deliveries of the commodity as it has to be shipped through this troubled region. In case there is sudden unexpected price rise government has no option but to increase the retail oil prices in their respective countries. As a result in higher prices cost of most of the products is increased in that country because these products are transported by automobiles which run on fuel oils. Oil is also required to run some of the major industries and to transport their raw materials hence there is also an increase in cost of production in general across the nation. This again leads to increment in sale price of finished products.

Consumer remains at the receiving end of this price rise spiral. Soon there is unprecedented increase in inflation levels of an economy adversely effecting disposal income and saving levels of individuals and nation as a whole. If oil prices stay on these high levels for long it is bound to hamper the growth of an oil importing economy. Government of these countries may try to divert funds from other resources to cover up for this price raise leaving other important sector to suffer more because of lack of fund allocations. Weaker economies are bound to get effected by this is short time periods while other stronger economies can defer this adversity for little longer time periods. All in all, prolonged high oil prise is bound to derail growth process of any oil importing economy.

(ArticlesBase SC #4352111)

Uncategorized May 8th, 2011

Most of the countries around the world are dependent on import of crude oil to fuel their industries and economic growth. The major economies of the world are recovering from recent recession are on their path of economic recovery. The rising oil price in recent past is going to play a spoil sport for such economies. Countries such United States, United Kingdom, European Union and Japan all had major plans to get their economies back on track for development but now are faced with a threat to that from rising oil prices. An increase in oil prices will significantly increase the cost of production across the board in these economic powerhouses. According to the IMF estimates world economy grew by 4.8% in the year 2010 but these estimates already have projected a lesser growth rate of 4.3% in the year 2011.

International Energy Agency (IEA) has already issued warnings concerning negative effects of sustained increase in oil prices in year 2011. The oil burden of an economy is going to be adversely effected in the current year as per IEA estimates. At prices of even $90 per barrel the oil burden of various economies of the world is fast approaching the threshold of 2008 recession. To make things worse oil prices have further above $ 100 per barrel barrier and there are no signs to recovery yet. Political situation in Middle East is getting volatile and the unrest is spreading in many countries within the region.

Many countries in the world have already developed strategic oil reserves which can be used to defer impact of this oil increase on their local industry. While developing countries like India which do not have any such reserves can provide very little resistance to this situation and may have no choice but to pass on this increase to the industrial and retail consumers.

Is the current trend is Oil prices is not curtailed soon it is bound to grip international markets and make economic conditions worse. World leaders are monitoring the current situation very closely and may come up with a solution to this. If things are left to take their own course it may turn into an ugly economic situation to tackle.

 

(ArticlesBase SC #4352127)

Uncategorized May 8th, 2011

Oil stocks will under perform crude oil and the oil etf for the next several years – but Energy Juniors will outperform both.

The market is now setting up for a great entry point into junior oil Stocks!

What we have here is an EXPLOSIVELY BULLISH ratio of West Texas Crude versus Major Oil stocks.
In technical parlance, this chart has recently broken out of a multi-year reverse Head and Shoulders pattern (or Cup & Saucer depending on your interpretation) painting a target of 0.14 at the least.

What is imminently clear is that when Oil Stocks have underperformed against Crude Oil, the general direction of the stock market has been lower!

This in and of itself is no secret as we have all been frustrated by the lack of progress in oil stocks versus the underlying commodities. But what is perhaps foreboding is that the relative underperformance is fated to go on for much longer – probably years. And by inference the Dow will remain in an extended Secular Bear Market. Confirming what we have been saying that returns on equities would be low if not negative for the next 5-10 years!

The highlight:

Now that we’ve painted the doom and gloom, there is some light at the end of the tunnel.

Oil stocks will outperform Crude Oil — the Dow will also rebound. We are now approaching an excellent entry point into Oil equities.

Please note we do not think that Oil Stocks will show negative performance over the next 5-10 years but we do think they will lag Crude Oil itself. Superior returns can be captured through smaller energy explorers and producers that will benefit from market trends as well as company specific news such as promising drill results. Oil stocks are the place to get set and the time is now!

(ArticlesBase SC #487788)