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 June 2008, Issue #27 Crude Oil Prices Topped the Historical High of $130 a Barrel On May 22nd, the crude oil prices went past the historical high of $130 a barrel, and continued to rise to $135.04 in after-hours trading. The U.S. Energy Department announced that retail gasoline prices could reach $4.10 a gallon in the summer. As oil prices keep skyrocketing, investors and consumers want to know if the oil price rally will continue and how that would affect the U.S. economy. There are numerous supply and demand factors that goes into determining the price of oil, lets take a look at some of them. From the supply side's perspective, there are concerns over the hurricane season in the Atlantic, because it will adversely impact the oil supply in the U.S. market. The Colorado State University hurricane forecasting team estimated that there was a 44 percent probability of a major hurricane hitting the Gulf of Mexico, which will cause a major disruption of the oil output. On the other hand, the U.S. has increased its fuel inventories, which can come into assistance to ease the high oil prices. Moreover, some analysts suspect that there will be a pullback of oil prices after the Beijing Olympics, since they believe that China has been piling up its fuel inventories, which have been a factor in stimulating oil prices. On the demand side, AAA is already reporting decreased driving as a result of higher gasoline prices, thereby lowering demand. At the same time, there are usually seasonal demand spikes as summer power usage comes into play. Moreover, the rising fuel prices in Asian countries are expected to curb demand, which will further help bring down oil prices back to the $100 level. Outside of supply and demand, many other factors should also be taken into consideration. For the U.S. investor or consumer, the weakening dollar is also a major factor that accounts for the increase in oil prices. It is commonly believed that the weaker dollar has encouraged investors to purchase dollar-denominated commodities in an attempt to hedge increasing inflation. However, at the beginning of June, Federal Reserve Chairman Ben Bernanke issued a warning on the risks of the weak dollar. This rare warning was taken by investors as a signal to the end of the Fed’s substantial rate cuts starting at the beginning of the year. Finally, there are debates within the government that high speculations are the main reason of the oil price rally. The U.S. Commodity Futures Trading Commission (CFTC) said at the end of May that it will apply more pressure with more intense regulations on energy trading by tracking index funds and obtaining more information on U.S. oil contracts that are traded overseas. Subprime Impact to the Online Brokerage Industry Firstrade does not invest in any asset-backed securities, therefore we are not at all affected by the sub-prime mortgage problems. Rest assured that your account with Firstrade is safe, plus don't forget our unlimited account protection for all Firstrade customers. Secure Trading Software Beta Firstrade is piloting a new secure browser technology designed to protect you from spyware, key-loggers, and network attacks that can lead to identity fraud or the compromise of your account data. This unique approach to online security creates an isolated "clean" environment while you conduct online transactions. Click here for more information and to join the pilot!  If you have any additional suggestions or would like to see a topic covered in the next newsletter, please send an e-mail to editor@firstrade.com. What's New at Firstrade Need to transfer your account from another broker to Firstrade, use our new Online Transfer Wizard to make the process quick and easy! On the Roadmap
In every issue we take a quick look at a stock that has been in the news. Feel free to make suggestions as to what stock you would like to see covered in next month's investment newsletterby sending an email to editor@firstrade.com, or the editor will pull a random symbol out of a hat.Since we discussed the oil crisis in this month's issue, we will continue this theme and talk about another energy company - EnerSys. EnerSys is the largest industrial battery manufacturer in the world, with a rich history of over 100 years. The company's worldwide headquarters is located in Reading, Pennsylvania, USA with regional headquarters in Europe and Asia. The company operates manufacturing and assembly facilities worldwide for customers in over 100 countries. Its products can be found in the industrial sector such as mining and railroad equipment. In addition, the company has a backup power division that provides emergency power supply to infrastructure companies. EnerSys owns its exclusive right to the Thin Pure Plate Lead (TPPL) battery technology, which enables the company to manufacture batteries that run longer with a smaller size. It is believed by analysts that these premium batteries will replace traditional lithium-ion batteries in the future. Although the TPPL batteries sales is only 10% of EnerSys total sales, there is a strong continued demand that exceeds the supply that the company currently produces. In the press release announcing EnerSys' 4th quarter results, the company expected net earnings to increase 84% compared to the 4th fiscal quarter of the prior year. Lets take a look at the key events and stock performance of EnerSys in the past few years.  Key Events:
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