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Crude oil remains the most important commodity on the planet. Without it, economic and political life as we know it would cease to function.

Four BIG trends will determine where prices go next:

  • China's transition to No. 1 oil importer.
  • The death of Hugo Chavez.
  • Iran's distribution of Chinese-made weapons.
  • New projections for the U.S. gas boom.

1) China's transition to No. 1 oil importer

At the best of times, the U.S. government is regarded as somewhat out of touch with what’s happening in the American “heartland,” much less the world at large, so much so that the phrase “inside the Beltway” was coined to define the syndrome.

If Cuba's Fidel Castro is America's favorite Latin American bête noire, then Venezuela's Hugo Chavez qualifies as Washington's reigning Prince of Darkness.

In 1960, Fidel Castro nationalized US business interests without compensation, bringing down on impoverished benighted country 51 years of sanctions that continue to the present day.

According to the U.S. Energy Administration, two months ago the United States total crude oil imports averaged 9,033 thousand barrels per day (tbpd), with the top five exporting countries being Canada (2,666 tbpd), Mexico (1,319 tbpd), Saudi Arabia (1,107 tbpd), Venezuela (930 tbpd) and Nigeria (918 tbpd.)

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