College Stock: Penny Stock News

The Dean Smells the Potential in Brazil's Energy Market!

As The Dean mentioned in the Introduction to the Wide World of Dean Series, South American countries are definitely on the map for investment opportunities. Countries like Brazil, Columbia, Ecuador, Venezuela and Argentina are filled with large potential in the expanding oil, natural gas and electricity markets, in addition to other natural resources and goods. Out of these countries, The Dean believes Brazil has the greatest potential for Ivy League Stock Picks in the future.

Aside from being the largest country in South America, Brazil is the 10th largest energy consumer and the 3rd largest in the Western world, behind the United States and Canada. With industrial and economic growth in recent years, Brazil has become a large energy consumer and has made necessary strides in increasing its total energy production. The Energy Information Administration (EIA) suggests that increasing domestic energy production, such as oil and natural gas, in priority and a long-term goal of the Brazilian government.

As of 2005, the EIA reports that Brazil’s energy consumption is made up of 48% oil and 35% of hydroelectricity resources, with only 7% coming from natural gas. The Dean believes that strange smell in the air just might be potential in Brazil’s energy market!

Brazil had an estimated 12.3 trillion cubic feet of proven natural gas reserves in 2008 and more is said to lay in sizable reserves in the country’s interior and offshore. The Dean believes that high oil prices could continue to keep the DEMAND of natural gas rising. Companies like Petrobas (NYSE: PBR) make up the majority of natural gas production in the country but The Dean believes that offshore exploration companies could contribute significantly to an exploding energy market.

The Wall Street Journal has reported that natural gas consumption has declined 25% in 2008 but production has increased more than 3% in the past year. This morning, Repsol (NYSE: REP), the biggest oil company in Spain, reported the “biggest gas discovery” ever found in Venezuela. The Dean believes this find could be instrumental in the return of natural gas production in South America because the company plans to “boost oil and gas production through new finds off the coasts of Brazil and Venezuela.”

The Dean says “Let the exploration begin!”

Due to the massive size of Venezuela’s natural gas reserves, The Dean believes that growth in Brazil, where natural gas has been under-explored, is more likely. Brazil has more than 1.5 million vehicles that run on compressed natural gas. Since this resource is “half the price of gasoline,” there’s a lot of speculation in South America that the use of this resource will increase and compressed natural gas filing stations will be NEEDED in the near future.

The Dean thinks that this could mean BIG things for companies like Agibras, CompAir, Ipiranga, Straughs and many others who develop technology for filing stations in the South American marketplace.

With Brazil’s economy bouncing back better than most of the world, The Dean thinks South America will be a worthy place of exploration, and possible travel, later this year.