Five Ways to Profit in a Global Economic Downturn

Robert Hsu, June 23, 2009

In this Issue:

Two Ways to Profit from Chinese Energy Demand
China's Top Two Energy Plays
Top 3 Trades for Profiting in a Global Recession
Top Three China Trades Today
Featured Stock: China's Leading Online Game Developer

Two Ways to Profit from Chinese Energy Demand

After a nearly 75% collapse last year, oil prices have started to move back up. In fact, over the past three months oil per barrel has doubled, climbing back from below $40 per barrel to around $70.

Despite the recent trek higher, though, it appears that oil prices hit a brick wall this week. Reports from the World Bank about the contracting global economy caused crude prices to fall for three straight days. And we must also consider that U.S. consumption remains at a 10-year low.

With these current concerns regarding the world economy, one must wonder if oil prices will continue to decline or if they'll somehow resume their path higher. I'm betting on the latter.

That's because China's growing energy needs has driven oil prices higher in the last four months. In May alone, China guzzled 33.23 million metric tons of oil -- that's a 6% increase from the same month a year ago. It also marks the second month in a row that Chinese oil demand increased.

What's sparking the increase in oil demand in China? There are three things, in particular, that are playing a key role in Chinese energy demand: 1) The country's aggressive infrastructure build out; 2) Chinese budding appetite for vehicles; and 3) China's overall energy needs.

Overall, I expect China's oil demand to put a floor under oil prices, keeping them above $60 per barrel for the rest of the year. With oil prices back in strong territory again, we're likely to see new oil and gas exploration projects pop up around the world -- with China leading the charge.

And that is creating profitable opportunities in China's oil and gas sector. Learn how you can start profiting today -- join China Strategy!

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