The Libra oil field off of the coast of Brazil might well be the biggest new discovery of crude reserves in the Western Hemisphere in over three decades. The Brazilian government said today that the field, which lies in the Santos Basin off the southeastern coast of Brazil, could hold anywhere between 7.9 billion and 16 billion barrels of oil.
Like the neighboring Tupi field, which is held by partially state-owned oil major Petroleo Brasileiro SA, Libra is in the ultra-deepwater "pre-salt area." The reserves are lucrative, but potentially expensive to develop.
The news boosted Brazilian stock index futures on expectations that Petrobras will be able to exploit them for massive revenues. Bovespa index futures were down 178 points to 71,276 on Thursday evening, but reversed course and were up 389 points to 71,665 at 9:01 a.m. EST.
The largest-ever discovery in the Americas was Cantarell, discovered off of the Mexican coast in 1976; the total size of that field is estimated at 35 billion barrels, with total recoverable reserves at 18 billion barrels.
The discovery probably won't significantly impact crude oil futures, which are poised for U.S. gross domestic product figures on Friday and the Federal Reserve's quantitative easing announcement next week.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.