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oil production

Will OPEC Cut Production?


Yesterday, OPEC released a bulletin saying low prices "remains a cause for concern" and OPEC is "ready to talk to all other producers."

The news has investors wondering: Will OPEC cut production?

Here's what you need to know about the cartel's dicey situation...

How Much Oil Does the U.S. Have Compared to Other Countries?

how much oil does the US have

If one number summarizes the global oil market, it’s 93,002,710.

That’s how much oil was produced around the world every day in 2014. But how much oil does the U.S. have compared to the world’s top producers?

This chart shows how much the top 15 oil-producing countries generated in 2014…

My Latest Read on the Oil Market (or Why It Gets Better from Here)

oil market

American crude is flowing into the oil market, setting new records. But soon the shale-inspired oil glut will shrink.

We have a paradoxical situation playing out in the oil market. The supply side is, for once, no longer a worry. But U.S. production is climbing despite the glut.

Here's what the numbers say about the future of the oil market...

Beware of Pundits Playing the "Iran Oil Card"

Iran oil

It's getting to be crunch time in the negotiations between the West and Iran over Tehran's nuclear program.

Despite an ill-advised attempt by U.S. senators to scuttle the talks, it's clear the negotiations in Geneva will continue.

Now, TV pundits have taken to the airwaves suggesting that an agreement would flood the market with Iranian oil.

Combined with production surpluses in the United States and elsewhere, the "instant" prognosticators are pushing their Armageddon pricing scenario again, putting additional pressure on oil prices.

Meanwhile, those playing the new "Iranian card" are shorting oil even further.

It's just the latest example of a self-fulfilling prophecy.

It works like this...

Chicken Little of "The Sky is Falling Brokerage" hits the airwaves warning of a collapse in prices, only to earn huge off-camera profits based on what he just said.

Meanwhile, average investors are left holding the bag as share prices fall.

There's a big problem with all of this "instant analysis," and I'm going to show you what it is - and how you can resist the temptation to try to catch this "falling knife" altogether...

Oil Prices Are Going Higher (Big Gains Ahead)

oil prices

The prospect for oil prices in the near future looks significantly more positive. By the end of the second quarter or shortly thereafter, we believe oil prices will rise.

This is despite the recent monthly report released by the International Energy Agency (IEA) that projects a more prolonged oil glut than initially forecast.

Here is what the IEA got wrong...

What's Next for Crude Oil Prices and Stocks After OPEC Meeting

crude oil prices

Last week's OPEC meeting in Vienna, Austria, was billed as the most important gathering of the cartel in years, with huge implications for crude oil prices.

The meeting's importance was felt almost immediately. After OPEC nations announced they would not cut oil production, oil prices plummeted. WTI crude oil is now down 37.8% from June and Brent oil is down nearly 40%.

Here's what investors can expect from oil prices moving forward, and the best strategy for oil stocks now...

Stocks to Buy: A Recent Sell-Off Gave Us This "Miracle Material" Bargain


I was one of the first analysts to pronounce this as the "Golden Age of Materials Science."

You know what I'm talking about - all those "Miracle Materials" that are changing our lives: There are the advanced composites that lighten our airliners; the great plastics that increase the "cool factor" of today's cars - while also making them safer and more economical. They include one of earth's more abundant resources, and the new discoveries, such as graphene, that promise to revolutionize biotechnology, computers, and industry.

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Oil Prices Promise to Head Higher As Mexican Production Dwindles

In addition to Iranian threats and growing demand, dwindling production of crude in Mexico promises to push oil prices higher as well.

Mexico is the third biggest exporter of oil to the United States. That's bad news for the U.S. economy which always gets hit when oil prices rise.

From 2004 to 2008, the U.S. Department of Energy reports such jolts, along with OPEC price manipulation, cost roughly $1.9 trillion. Plus, a recession followed each major blow.

According to the U.S. Energy Information Administration (EIA), Mexican oil production reached a peak of 3.2 million barrels a day in 2008. And by 2011, it wasn't even producing 3 million barrels a day.

Since then oil production has slipped to 2.5 million barrels a day.

Worse still, Mexico could actually become a net importer of oil within a decade if it cannot find fresh discoveries to make up for the 25% production drop since 2004 and fails to change its current policies.

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This Key Energy Metric Could Make You A Lot of Money

Last week I discussed what EROEI is-and how to use it.

This week I'd like to talk about how this key metric affects the balance of your energy investment portfolio.

Now, this is certainly not the only element in determining preferable stock moves, but it's critical that you know the EROEI because it could make you a lot of money.

Recognizing the real elements that determine the genuine cost of energy production, EROEI is becoming an important factor in estimating profit margins.

And those margins certainly influence the performance of a stock as we've seen all across the energy value chain in recent months.

EROEI refers to the amount of energy used to produce energy.

If this ratio produces a figure of 1.0, EROEI is telling us that it takes one barrel of oil equivalent to produce one barrel as a result.

Anything under 1.0 means that more energy is consumed in the production process than is gained as an end product.

EROEI has the advantage of being a useful yardstick throughout the energy curve - from upstream production sites (wellheads, generating facilities) through midstream (gathering, transit, storage and initial processing) to downstream (refineries, terminals, wholesale and retail distribution, end use).

Some applications of EROEI are already in wide usage, although we don't tend to think about them in these terms. Energy-efficiency ratings on appliances, heating and cooling systems, windows, or building supplies are an application at the end of the energy curve.

But how can we use this to fine-tune an investment portfolio?

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Oil Prices: U.S. Drought Hurting More than Crops

The unusually warm and dry weather across more than half of the United States has resulted in one of the worst droughts in U.S. history. Much has been made about how the crisis will affect crops and cattle, but it could also alter oil production and prices.

With nearly 64% of the contiguous United States in a drought, the highest percentage since the U.S. Drought Monitor began recording such data in 2000, the economic repercussions are searing.

To date, 2012 has already surpassed 2011's $12 billion in drought losses, and this year is on pace to rival the droughts of 1980 and 1988, which endured losses worth a current value of $56 billion and $78 billion, respectively.

According to 70 years' worth of data studied by the National Center for Atmospheric Research, weather (from heat waves to cold spells to droughts) can cause up to a 1.7% rise or fall each year in the U.S. economy's gross domestic product.

Farmers and agricultural companies have been voicing concerns, now oil and gas companies are speaking up.

With farmers trying to hold on to every ounce of water they find, oil companies don't know how they will get the water needed to drill into their oil fields.

"Water is the key to unlocking oil and gas. We take it for granted," in the U.S., said Chris Faulkner, president and chief executive officer of Breitling Oil & Gas, which has numerous operations in several of the new shale regions.

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The Oil Supply Constriction Is Fast Approaching

Shortly I'll be off to Victoria Station, the train to Gatwick, and a welcome flight home to Pittsburgh. However, there is an accelerating development I need to tell you about before getting on the plane.

As you know, last month, the Paris-based International Energy Agency (IEA) and the U.S. government announced they were releasing 60 million barrels of crude oil into the international market, 30 million of which coming from the U.S. Strategic Petroleum Reserve (SPR).

I said at the time that this would only make matters worse. The market has already confirmed my conclusion.

The move hit an unprepared market while I was in Athens on the first leg of this five-week trip. And from the outset, neither the rationale provided by Paris nor Washington rang true.

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