Category

Oil

How to Profit from the Other Oil Story in the Gulf

While much of the attention remains fixed on BP (NYSE: BP), Transocean Ltd. (NYSE: RIG), Halliburton Co. (NYSE: HAL), and on the attempt to plug a gusher in the Gulf, I have been watching another development down here in the Caribbean this week. It is going to impact crude oil and oil product movements throughout […]

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Occidental Petroleum Leads Onshore Oil Hunt as Offshore Drilling Faces Tighter Regulation

Occidental Petroleum Corp. (NYSE: OXY) announced yesterday (Wednesday) it was doubling the capacity estimate for a California oil field discovery as U.S. offshore drilling restrictions fuel onshore interest.

The Los Angeles-based oil explorer has focused on onshore oil production for years and estimates its current discovery near Bakersfield, California holds up to 500 million barrels of oil, valuing it at more than $34 billion at current prices.

"There is a lot of new interest in onshore-production potential in the U.S. and Occidental is at the forefront of that," Brian Youngberg, an analyst with Edward Jones & Co., told Bloomberg.

Occidental, the fourth largest U.S. oil and gas producer, made the announcement at a meeting with investors and analysts Wednesday in New York. Chief Executive Officer Ray R. Irani detailed the company's long-term strategy for profitability.

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China Continues Its Run on African Commodities With $23 Billion Nigeria Oil Deal

China signed a $23 billion oil deal with Nigeria Thursday, reducing Nigeria's fuel imports and positioning China within reach of high quality African oil reserves.

China State Construction Engineering Corporation Limited (CSCEC) signed the deal to build three oil refineries with Nigerian National Petroleum Corporation (NNPC), which said this could be the biggest deal China has ever made with Africa.

Nigeria, Africa's leading oil producer, imports about 85% of its fuel because of the poor condition of its refineries. Shehu Ladan, head of NNPC, said at the signing ceremony that the added refineries would reduce the $10 billion spent annually on imported refined products.

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Question of the Week: Readers Respond to Money Morning's Oil Spill Query

News of BP PLC's (NYSE ADR: BP) Gulf Coast oil spill was only hours old when Money Morning readers first weighed in on the tragedy. The chief concern: U.S. taxpayers will yet again be stuck with the tab for a problem caused by corporate malfeasance and lax governmental oversight.

Stricter government regulation could enforce safety shut off valves with remote control operations – a device that could have prevented the current disaster. The hefty $500,000 price tag on the safety control has been a past deterrent, but hard to argue against in the wake of the billion-dollar Gulf spill.

But investors understand that the long haul is what really matters, meaning that there's perhaps a bigger question here than who's at fault, and what will this cleanup cost….

Washington wants to limit U.S. dependence on foreign oil and create jobs, while also protecting natural resources and preventing future spill disasters. But the United States faces a future in which oil prices are likely to soar as thirsty nations compete for dwindling supplies.

Clearly, our leaders in Washington, the U.S. energy sector and U.S. environmental agencies and interests will have much to debate in the months and years to come.

This prompted last week's installment of Money Morning Question of the Week: Is U.S. offshore oil drilling going to disappear – why or why not? How does the industry affect you as an investor, taxpayer and consumer?

Here is a collection of thoughtful reader responses regarding the future of drilling and the oil spill.

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BP Bites the Bullet: Analyzing the Full Cost of the Gulf Oil Spill

The Exxon Valdez dumped 260,000 barrels of oil off the coast of Alaska, and ExxonMobil Corp. (NYSE: XOM) ended up spending about $4 billion in the wake of that disaster. That means Exxon spent nearly 600 times more on cleanup and litigation than what the oil was actually worth at that time.

So how much will BP PLC's (NYSE ADR: BP) Gulf oil spill, which is significantly greater, set it back?

The fact is, it's still impossible to know exactly how much BP will have to cough up to cleanse itself of this crude fiasco without knowing the full extent of the damage caused. But the picture is getting a little bit clearer each day the cleanup effort wears on.

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The Oil Spill: Disasters and Opportunities

I find it uncomfortable to advise investors on how to make a profit in the aftermath of a tragedy. And the drama unfolding in the Gulf of Mexico is rapidly developing into just that sort of situation. It has already led me to provide one alert – "Expect Transocean to Keep Going Down" (April 30) […]

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High Oil Prices: Four Ways to Profit From the Looming Zoom

Let's face it: Over the long haul, oil prices are headed higher -probably much higher. For U.S. consumers, high oil prices will represent a major challenge. For investors, however, those same high oil prices could stand as the profit opportunity of a lifetime. Read this report from Money Morning Executive Editor William Patalon III, and find out how high oil prices could shoot your portfolio to new highs.

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We Want to Hear From You: Is U.S. Offshore Oil Drilling Going to Disappear?

News of the Gulf Coast oil spill was only hours old when Money Morning readers first weighed in on the tragedy. The comments and the e-mails haven't stopped since. The chief concern: U.S. taxpayers will yet again be stuck with the tab for a problem caused by corporate malfeasance and lax governmental oversight. Stricter government […]

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By Failing to Lock Up Canadian Oil Supplies, U.S. Exposes National Energy Plan Flaws

Under new U.S. President Barack Obama, it was all supposed to be different. The new administration had vowed to deliver a national energy plan that would guarantee this country's future energy security. The rich and geographically nearby Canadian oil sands should have been part of that plan.

At the end of the day, the United States dropped the ball on the oil sands, meaning Americans are stuck with yet another pieced-together national energy plan that has more sizzle than steak.

Unfortunately, the cost of this misstep will be higher than ever.

For a detailed look at America's latest energy miscues, please read on...