The Hidden Lesson in U.S. Gas Exports

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It's the sort of headline that drives the barflies at my family's bar in Baltimore just crazy.

See, to them, it defies logic…

In September, the U.S. exported 430,000 more barrels of gasoline than it imported. The country is now on track to become a net exporter of refined oil products for the first time in 62 years.

Meanwhile, domestic prices at the gas pump are poised to rise to record levels.

Combine those two facts, and it appears you have a paradox.

The barflies blame government… oil companies… even the bartender… (we do have to factor shipping costs into beer prices).

"How," they ask, "can we export so much gasoline, but gas prices are going through the roof?"

After suggesting an answer, I explain they need to ask another question…

They should consider this: "Why aren't they investing in companies poised to profit from this situation?"

You see, while consumers and politicians will spend all this time pointing fingers over this story, a real lesson on the energy markets continues to emerge…

And it's a lesson that savvy investors and readers of OEI have heard before: Where and how to profit when news like this breaks.

Nothing New to See Here…

Since the inception of Oil & Energy Investor, Kent has written at length about the new age of domestic energy production taking place in the United States.

And why?

Because it's the biggest energy story to hit our shore in decades…

New oil and gas shale plays across the rural United States have provided access to a wealth of new supplies once considered unattainable. The levels of production will allow the U.S. to export more natural gas within the next few years, thanks to large-scale projects like Cheniere Energy's Sabine Pass terminal in Louisiana.

And then, over the weekend, we learned that the U.S. refiners are producing excess levels of gasoline on our shores, even as overall demand for the fuel has dropped.

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The Hidden Lesson in U.S. Gas Exports
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  1. Earl Richards | December 9, 2011

    If there is supposed to be an energy shortage in the US, then, why are petroleum products being exported?

  2. Mark Troxell | December 9, 2011

    We are importing oil and exporting our refiners fuel products.If the idiots we put in charge of our country would let us , we could be energy independent in the near future. That would ruin their plans to make us all desperate and completely willing to accept the bitter pill they have for us.

  3. Bernard Durey | December 9, 2011

    Just curious as to the developments around Cushing. I see Enbridge of Canada has recently purchased a 50% interest in the Seaway Crude Pipeline System. Theyalso wish to reverse the flow of that line from Cushing to the gulf coast. TransCanada still wishes to build a pipeline from Cushing,Oklahoma to the gulf coast. Previously or prior TransCanada was or is the pipeline builder for Keystone and Keystone XL if it goes across the states involved. Enbridge is suppose to be the company involved in transporting the crude from Canada through these pipelines to their designated points. Now it appears with their 50% purchase of the pipeline between Cushing and the gulf they are supplying or attempting to supply their own line for that segament of the transporting issues. Does not TransCanada have a contract with Enbridge? I gues whose oil is causing the glithc,etc. Will it still bring gasoline prices here to $5 per gallon when it appears,at least this sector of that project is all for export from Canada through the states involved and out to other countries. Sunday there was a survey out or I was called on a survey on Nebraska issues. Mainly the questions focused on TransCanada,keystone,keystone XL,and the Ogallala. If one didn't have much or any knowledge on those isssues some questions could be quite confusing. However,you take the con off of confusion and you have fusion where peopel can fuse a problem to come up with a solution and maybe end the confusion for some while others will stillstay confused on the issue or issues. Once again thank you and have a nice day and a better tomorrow.

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