$150 Oil: Four Ways to Profit as Crude Prices Rocket
Crude oil is about to skyrocket in price.
In fact, I believe we'll be looking at $150-a-barrel oil by mid-summer.
For most U.S. consumers, higher oil will equate to higher expenses, and a bigger drain on the household budget.
But for investors who understand where to look, these higher crude prices represent a substantial profit opportunity – one that will eradicate any concerns you have about higher household expenses.
And I can tell you precisely where to look.
BP PLC (NYSE ADR: BP) Attempts Another Venture Into Russian Oil Industry in $16 Billion Deal
BP PLC (NYSE ADR: BP) on Friday announced it was entering a $16 billion share swap deal with Russian oil industry giant NK Rosneft OAO (PINK: RNFTF). The deal will give BP access to areas of the Russian Arctic that were previously off limits to foreign companies, but it will come at a political cost.
The deal involves BP swapping 5% of its shares, valued at $7.8 billion, for 9.5% of state-controlled Rosneft's shares. The British oil company already owns a 1.3% stake in the Russian business. BP Chief Executive Officer Robert Dudley said the deal is the first cross-shareholding between a Russian state-owned national oil company (NOC) and western oil giant, and called the move "a new template for how business can be done in our industry."
The joint venture will make Rosneft the largest single BP shareholder. Their newly formed joint operating company will be two-thirds owned by Rosneft and one-third owned by BP. It will spend up to $2 billion in an initial phase of testing and well-drilling.
- The 2011 Oil Price Forecast: Get ready for $150 oil – it's right around the corner. Here's how you profit.
Politics – Not Oil Prices – Are What's Behind the Deepwater Drilling Debate
With oil prices rising and the Gulf oil spill fading from the forefront of the American psyche, deepwater drilling is set to emerge as a very hot, and very controversial topic in the months ahead – particularly among Republican representatives.
The GOP traditionally has been the party that supports the development of fossil fuels, while Democrats tend to push for more environmental regulation and a move toward renewable resources.
Right now, oil industry lobbyists believe higher prices warrant more drilling off the U.S. coast, but environmental groups, congressional Democrats, the Obama administration – which relaxed drilling restrictions just months before BP PLC's (NYSE ADR: BP) disastrous spill – aren't likely to agree.
In fact, lawmakers are already sniping at one another, spurred by the findings of U.S. President Obama's oil spill commission, which was tasked with investigating the Gulf oil spill.
Russian Oil & Gas Sector Headed for Major Shakeup
I am here at the request of the Russian Ministry of Energy, to sit as an outside member on a task force reviewing production options for the next five years.
But the "here" that I referred to is in Siberia – in every sense of the word.
The cold snap I experienced before leaving Moscow has hit Surgut City with a much greater bite. When our government plane landed here at 3 a.m. one recent morning, the temperature had fallen to 35°F below zero. The pilot kept the engine running while we disembarked. Otherwise, the plane's oil lines could freeze.
But there was no need to worry. A heat wave was to hit the next day – pushing temperatures all the way up to minus 3°F.
Energy Forecast: Oil Prices Poised to Again Test Record Levels in 2011
After starting the year at slightly more than $80 a barrel, oil prices yesterday (Tuesday) rose to their highest level in two years, with West Texas Intermediate (WTI) crude surging as high as $90.76 a barrel on the New York Mercantile Exchange (NYMEX).
But that 13% advance is just the beginning.
Crude oil prices are poised to again break the psychologically important $100 a barrel mark in a bid to move higher throughout 2011 and 2012, and some forecasters are calling for prices to zoom by as much as 65% from here.
If that happens, crude oil would approach – or possibly even eclipse – the all-time high of $147 a barrel, a price not seen since the summertime speculative frenzy of 2008.
With $2.3 Billion Deal, Thailand Joins Asian Rush For Canadian Oil Sands
Thailand last week joined the crush of Asian countries rushing to acquire a stake in Canada's giant oil sands projects when its PTT Exploration & Production Public Co. Ltd. (OTC ADR: PEXNY) agreed to buy 40% of Statoil ASA's (NYSE ADR: STO) Canadian oil sands project for $2.3 billion.
PTTEP, the exploration and production unit of state-owned PTT PCL, is making Thailand's first foray into Canada's oil sands, the largest source of crude oil outside the Middle East.
Norway's Statoil will keep majority ownership and remain the primary operator in the Kai Kos Dehseh project in northern Alberta, which it bought in 2007, according to the deal announced on Tuesday.
Everything You Need to Know About Tomorrow's OPEC Meeting
Crude dropped for the second straight day yesterday (Tuesday) after Saudi Arabia made it clear that the Organization of the Petroleum Exporting Countries (OPEC) will leave its production targets unchanged at its meeting tomorrow (Thursday).
Crude oil for November delivery fell 54 cents a barrel – or 0.7% – to finish at $81.67 a barrel on the New York Mercantile Exchange yesterday. Even with yesterday's decline, oil prices are up 11% over the past 12 months.
Speaking in advance of tomorrow's OPEC meeting in Vienna, Saudi Oil Minister Ali al-Naimi said that prices between $70 and $80 a barrel are "ideal," and noted that the market is "very well-balanced" right now. In a related development, Sanford C. Bernstein & Co. LLC slashed its oil-price forecasts for both next year and 2012, and attributed the new viewpoint to big stockpiles.
But this only provides you with part of the picture. And it'll lead you to the wrong conclusions.
So here's the proverbial "rest of the story" – including everything you need to know about tomorrow's OPEC meeting.
CNOOC Creates Biggest China-U.S. Oil Deal For Stake in Shale Gas Industry
China's state-owned energy company China National Offshore Oil Corp. (CNOOC) (NYSE ADR: CEO) late Sunday announced it would invest $2.16 billion in U.S.-based Chesapeake Energy Corp. (NYSE:CHK) to increase China's stake in unconventional gas resources like shale gas. It is the largest ever China-U.S. oil and gas deal.
CNOOC initially will pay $1.08 billion for a 33% stake in Chesapeake's Eagle Ford shale acreage in Southern Texas. China's third-largest oil company will invest an additional $1.08 billion by paying 75% of Chesapeake's drilling and completion costs in coming years, allowing Chesapeake to tap hard-to-extract shale gas deposits and boosting its weak balance sheet.
The deal highlights China's need to develop its shale-gas extraction techniques. The country has 26 trillion cubic meters of shale gas reserves that are largely unexplored due to a lack of drilling ability – and Chesapeake is a pioneer in the shale gas industry.
Iraq's Energy Sector Is Moving Forward – With or Without the U.S.
Iraq on Wednesday broke the record – 207 days – for the time between a parliamentary election and the formation of a government. But while Iraq's government is at a standstill, the country's energy sector remains dynamic and U.S. companies can't afford to wait for the political climate to thaw before diving in.
Iraq is slowly retaking the shape of one of the world's most prolific oil producers. Its reserves are actually 25% larger than previously thought.
"Iraq's oil reserves which are extractable are 143.1 billion barrels," Hussein al-Shahristani, Iraq's oil minister, said earlier this week, basing his comments on data provided by Organization of Petroleum Exporting Countries (OPEC).