Crude Oil Prices Distract Investors

It sure seems like financials have taken a backseat to crude oil prices, doesn't it? Sure, major banks like Bank of America (BAC), JP Morgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) beat the Street's expectations, but a loss is a loss!

New York-based Citigroup, for example, posted a loss of $2.5 billion–significantly lower than the $6.2 billion gain reported in the same quarter of 2007! Anyone who thinks the 7.7% jump in C's price per share after it reported layoffs, defaults and write-downs is a significant sign of recovery couldn't be more disillusioned.

Tuesday, Wachovia (WB) posted an $8.9 billion mortgage-related quarterly loss! WB also squashed its dividend and axed 10,700 jobs. Despite the abysmal report, the firm's shares lost only 9 cents in early morning trading–only because shares traded above $50 less than year ago, and now they're south of $15!

As the banks and major brokerages clean house, investors seem distracted by the recent slide in crude oil prices. But does the sell-off indicate that the crude bubble is bursting? Hardly! Less than two weeks ago, the same investors who are now pulling money out of the market drove prices to new highs above $147 a barrel!

Anyone who says the current declines indicate a drop in demand and a significant increase in supply can't see the forest from the trees. Perhaps in the U.S. demand for oil is waning, but China and India are barely halfway through their growth spurts and are seeing double-digit returns in energy demand each year!

Did you know that if China's current 8% economic growth rate–leveled off from 12%–continues over the next 5 years, it will be impossible for China to meet its internal energy needs? Over the next 20 years, the number of cars in China is expected to grow 90 times! By 2030, China will produce–and drive–more cars than the U.S. And on the home-front, transportation accounts for 70% of the 21 million barrels of oil consumed each day. Imagine the exponential impact a country of 1.2 billion people will have on crude oil supplies!

One of the largest and most innovative oil companies in China that's cashing in on the high demand for oil is on our Global Growth Buy List, China National Offshore Oil Corportation (CEO). PortfolioGrader Pro, my FREE stock tool, has given CNOOC an A grade for 12 consecutive months!

On Monday, the Chinese oil firm reported that its first-half net profit climbed 35%, thanks in large part to the company's focus on crude production. CNOOC is just one of the many stocks my Global Growth subscribers own that will profit from high oil prices.

Crude oil prices may have fallen off as of late, but it's not a permanent shift. I advise that you use this temporary pull back to your advantage–pick up a few extra shares of your favorite oil stocks. Just you wait–the high-priced crude ride is far from over.

If you want to know the stocks I think are really going to take off in this environment, subscribe to Global Growth today. Act now and get my stock advice risk free for 90 days!