Energy Report

The energy industry was calm during the past week. Some news however is as follows. Russia has ruled that Exxon Mobil will not automatically receive additional reserves in the Sakhalin oil field despite its discovery by Exxon. The reserve which is currently next to an area already licensed by Exxon will be auctioned off instead. In addition, BP has begun restarting its Texas City refinery which will add about 300,000 barrels a day to supply. This action by BP will help mitigate the shutdown of one of Valero’s refineries.

As oil has become more expensive, the demand for biofuels and environmentally friendly fuels has increased. Thus, it is projected that in 2007 corn may outperform oil in the futures market due to increased demand from China. Corn is one of the key ingredients used in creating ethanol.

USO - $49.35
XLE - $58.00