"Japan's Oil Imports Fall for First Time in 9 Months."

Bloomberg (July 24^th) ~ "Japan purchased 18.5 million kiloliters, about 3.8 million barrels a day, of oil last month, down 0.7 percent from a year earlier, according to a Ministry of Finance trade report released in Tokyo today. The oil import bill grew 55 percent to 1.49 trillion yen ($13.8 billion) as crude oil prices hovered near all-time highs." Just 7 tenth of a percent decline with oil prices over $130/barrel. The headline leads one to expect something a little more dramatic, like maybe a whole percent. The fact that they rose for the 6 months ending in June by 5.7% somehow missed the headline.

http://www.bloomberg.com/apps/news?pid=20601207&sid=aQct1xeliHw0&refer=energy

"Fundamental changes are under way in the energy field the significance of which we have not yet fully grasped." -- Mohamed ElBaradei, Director-general of the International Atomic Energy Agency

Financial Times (July 24^th) ~ "World leaders need to take action on the energy crisis that is taking shape before our eyes. Oil prices are soaring and it looks less and less likely that this is a bubble. The price of coal has doubled. Countries as far apart as South Africa and Tajikistan are plagued by power cuts and there have been riots in several nations because of disruptions to electricity. Rich states, no longer strangers to blackouts, are worried about security of energy supply. In the developing world, 1.6bn people – about a quarter of the human race – have no access to electricity." The Master Resource is energy and the world is facing a crisis not an investment bubble; our leaders and the public need to get this straight.

http://www.ft.com/cms/s/0/b3630dd0-58b5-11dd-a093-000077b07658.html

An Energy Crisis in the Middle East????

Khaleej Times Online (July 24^th) ~ "It is ironic that the Arabian Gulf, which contains two thirds of the world's proven oil reserves and is the epicentre of the energy business, faces a regular gas shortage, possibly as high as 7 billion cubic feet in the next decade. This is going to have a seismic impact on the GCC's oil production, consumption and exports, a major factor in crude oil prices."

Bottom-line; NET EXPORTS! This worth reading.

http://www.khaleejtimes.com/DisplayArticleNew.asp?col=&section=opinion&xfile=data/opinion/2008/July/opinion_July98.xml

Link to this week's Master Resource Report 2008-07-25

Disclaimer

This publication is dedicated to the education of readers and is an information service only. While the editor is licensed to offer investments and investment advice, the information provided herein is not to be construed as an offer to buy or sell securities of any kind, is the opinion of the author and not endorsed by KMS Financial Services, Inc. It is possible at this or some subsequent date, the editor and/or affiliated parties may own, buy or sell securities discussed in this newsletter, or based upon information provided in the newsletter, or contrary to information provided in this newsletter. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. We make every effort to provide timely information, but cannot guarantee specific delivery times due to factors beyond our control.

"Access to off-limits oil reserves may raise false US hopes."

Financial Times (July 16^th) ~ "No one knows the extent of US oil and natural gas reserves in the offshore and Arctic areas that are off-limits to drilling. The last time they were surveyed was in the 1980s and the technology then used is no longer considered accurate, say industry experts." So does that mean we should be taking those 18 billion in recoverable reserves being bandied around as worth a very small grain of salt. Not to mention peak production is more than a decade away.

http://www.ft.com/cms/s/0/cafe7c3c-52ce-11dd-9ba7-000077b07658.html

The next time someone questions climate change ask what their position on ocean acidification is. More than likely they won't have any idea what it even is.

WIKIPEDIA ~ "Ocean acidification is the name given to the ongoing decrease in the pH of the Earth's oceans, caused by their uptake of anthropogenic carbon dioxide from the atmosphere." It still all comes down to carbon emissions; it is just harder to make a movie about "Ocean Acidification". However, your tuna fish sandwich may depend on it.

http://en.wikipedia.org/wiki/Ocean_acidification

Matthew Simmons interview in the Economist

Economist (July 10^th) ~ "In short, as Mr Simmons readily concedes, the debate between proponents and critics of "peak oil" boils down to an argument about timing. The optimists think that technology will advance quickly enough to offset declining production from mammoth fields such as those Mr Simmons studied in Saudi Arabia. But he and his disciples think the declines will come too soon, and be too sharp, for the world to adapt in time. The whole row could easily be solved, he says, if Saudi Arabia would only allow independent auditors to assess its reserves." Funny thing about timing, if you get wrong the results can be really bad.

http://www.economist.com/people/displaystory.cfm?story_id=11702995

Also in the same issue of the Economist - "Record oil prices fail to halt the North Sea's decline"

Economist (July 10^th) ~ "Britain has seen production drop by around 40% since its peak of 4.5m barrels a day in 1999." From 2006 to 2007 production fell another 3.5%. This week's Master Resource Report also looks at the North Sea's production history and future; it is not good.

http://www.economist.com/world/britain/displaystory.cfm?story_id=11707772

What happens if your customers are going bankrupt?

CNNMoney.com (July 15^th) ~ "According to a report on the nation's top airlines released by Fitch Ratings Tuesday, record fuel costs and weak cash flow may lead to "multiple bankruptcies and liquidation" for major U.S. airlines in 2009." What can I say?

http://money.cnn.com/2008/07/15/news/economy/airlines/

Link to this week's Master Resource Report 2008-07-18

Disclaimer

This publication is dedicated to the education of readers and is an information service only. While the editor is licensed to offer investments and investment advice, the information provided herein is not to be construed as an offer to buy or sell securities of any kind, is the opinion of the author and not endorsed by KMS Financial Services, Inc. It is possible at this or some subsequent date, the editor and/or affiliated parties may own, buy or sell securities discussed in this newsletter, or based upon information provided in the newsletter, or contrary to information provided in this newsletter. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. We make every effort to provide timely information, but cannot guarantee specific delivery times due to factors beyond our control.

"For the past half century, America has spent the bulk of its infrastructure money on building highways—only to see that soon, $7 per gallon gasoline prices will lead to fewer and fewer people using them.." Jeff Rubin, CIBC Chief Economist, June 2008

"Crude-oil futures posted their largest single-day drop in dollar terms since the first Gulf War…"

Wall Street Journal (July 9^th) ~ "Oil futures have fallen 6.4% since settling at a record $145.29 Thursday…." Why is there no cry for the speculator's heads when the price declines a record amount? There is more on speculators in this week's report.

http://online.wsj.com/article/SB121551917558335515.html?mod=hpp_us_whats_news (WSJ subscription required)

"Countries outside the Opec oil cartel will barely be able to increase their production of crude oil over the next five years for the first time in the industry's history…"

Financial Times (July 2^nd) ~ "Despite billions of dollars of investment, the challenge of pumping ever more oil out of ageing fields is proving so great that non-Opec countries will, in the next five year, have to rely on bio-fuels, such as corn-based ethanol, for 50 per cent of their growth in overall fuels." In this week's report there is some important information about biofuels. The bottom line; forget about that 50% of non-Opec growth coming from biofuels over the next five years. This article is well worth reading, it has further information that helps put this whole mess into perspective.

http://www.ft.com/cms/s/0/73d47eaa-47d1-11dd-93ca-000077b07658.html

LNG will face the same Net Export problem that oil faces.

Wall Street Journal (July 9^th) ~ "The project should go a long way toward meeting Abu Dhabi's surging demand for natural gas for its expanding petrochemical industry, new gas-fired electrical stations and desalination plants. Despite their vast oil reserves, the sheikhdoms of the Persian Gulf are struggling to meet their own domestic energy needs, and they are becoming increasingly dependent on gas-burning power plants." This is one issue that may bring T. Boone Pickens' ideas for the use of natural gas into question. Watch his video on page 4 of this week's report; what do you think?

http://online.wsj.com/article/SB121552247387535599.html?mod=hps_us_whats_news (WSJ subscription required)

"OPEC has put all it can into the market. Any more oil to go into the market doesn't exist." Iran's Oil Minister Gholam Hossein Nozari

Link to this week's Master Resource Report 2008-07-11

Disclaimer

This publication is dedicated to the education of readers and is an information service only. While the editor is licensed to offer investments and investment advice, the information provided herein is not to be construed as an offer to buy or sell securities of any kind, is the opinion of the author and not endorsed by KMS Financial Services, Inc. It is possible at this or some subsequent date, the editor and/or affiliated parties may own, buy or sell securities discussed in this newsletter, or based upon information provided in the newsletter, or contrary to information provided in this newsletter. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. We make every effort to provide timely information, but cannot guarantee specific delivery times due to factors beyond our control.

Best wishes to everyone on the Fourth of July.

Seattle PI Op-ed, Mexico and video of amazing coal mining technology.

"As Good As It Gets"

ASPO-USA (July 2^nd) ~ "Deceptive statements now dominate the political discourse on America's oil crisis in the 2008 presidential campaign. The confused debate about Republican supply-side measures versus Democratic demand-side measures entirely misses the central point: domestic oil production is about to experience a mini-peak in the years 2010-11 and then resume its inevitable decline."

http://www.aspo-usa.com/index.php?option=com_content&task=view&id=405&Itemid=91

Well there goes some more net exports!

Bloomberg (July 3^rd) ~ "Saudi Aramco and Dow Chemical Co. plan to build a $26 billion petrochemicals complex in Saudi Arabia to take advantage of the world's biggest oil reserves and meet rising demand for plastics used in consumer goods…" This is one very clear example of the future of net exports available to the world market. Net exports and Net energy have nothing to do with reported reserves!!!!

http://www.bloomberg.com/apps/news?pid=20601207&sid=aUBcvM33Xf5Q&refer=energy

Link to this week's Master Resource Report 2008-07-04

Disclaimer

This publication is dedicated to the education of readers and is an information service only. While the editor is licensed to offer investments and investment advice, the information provided herein is not to be construed as an offer to buy or sell securities of any kind, is the opinion of the author and not endorsed by KMS Financial Services, Inc. It is possible at this or some subsequent date, the editor and/or affiliated parties may own, buy or sell securities discussed in this newsletter, or based upon information provided in the newsletter, or contrary to information provided in this newsletter. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. We make every effort to provide timely information, but cannot guarantee specific delivery times due to factors beyond our control.