Dramatic Opportunities for Direct Private Equity Investment

Crude oil and natural gas are commodities: A Commodity is a substance usually produced and/or sold by many different companies or individuals and is uniform in quality between companies that produce and sell it. You cannot tell the difference between one firm's product and another’s. A commodity is also usually bought and sold by investors through futures contracts. The price of the commodity is subject to supply and demand. Supply and demand risk is actually the reason commodities exchange trading began. For example, a farmer risks the cost of producing a product ready for market at some time in the future because he doesn't know what the selling price will be.

As a commodity, virtually every place on earth uses and needs products produced from oil and gas. Aside from the typical usage of gas and oil, there are over 6,000 common daily uses. We all need it.

Global Oil Supply and Demand

Today’s demand for oil is outpacing supply by a widening margin. China, India, and other Asian Countries project their economy will grow 10% each year for the next decade. To do this, it is gobbling up iron ore for new skyscrapers and vehicles, and buying up as much oil as they can to heat houses, build roads and fill gas tanks. They are purchasing so much; in fact, they are single handedly driving up prices.

In our modern world, oil will always be widely used. The benefits of oil are permanent and tangible. Because the U.S. economy is constantly stumbling, investing in oil and gas is much more important now than at any other point in our history.
  • America imports approximately 9 million barrels of crude oil per day.[1]
  • In 2012, the U.S. produced approximately 6 million barrels of crude oil per day[1].
  • Since 2000, world production of oil has risen by 9.6%.[2]
  • Since 2000 world consumption of oil has risen by 14.1%.[2]
  • World population is growing @ 1.096% or 76,959,323 per year with continued demand for oil.
  • GM sells a new car in China every 12 seconds; a new car sold in China every 2.3 seconds.[3]
  • Japanese buyers are lining up for U.S. natural gas. “a world-wide thirst for natural gas--particularly in Japan. Japan shut down the last of its 50 nuclear reactors, switching off a power source that once produced 30% of the nation's electricity.[4]
  • There are over 6,000 products we use every day made from petroleum products: Crude oil is feedstock for these products. When crude oil is refined, its various chemical parts are separated and some become gasoline, some lubricants, some asphalt, and others the raw materials for plastics and rubber and many more basic and complex products.
  • Next to food, oil is the most important commodity in the world.
    Sources:
  • 1. US Energy Information Administration (USEIA), 4/27/12
  • 2. Est. world population 7,021,836,029, July 2012 est. CIA World Statics, April 13, 2012.
  • 3. China Car Times
  • 4. USA Today on May 25, 2012,