The global oil market in 2013 was dominated by geopolitical disruptions, a huge boom in U.S. domestic production, and double-digit gains for energy investors. Energy stocks rose about 18% in 2013.
This year's gains should be even better, especially if investors follow the five biggest oil investing trends of 2014.
Just look at what's happening in the United States…
The U.S. Department of Energy predicts that the boom in domestic oil production is going to reach levels not seen in more than 50 years by 2016. In fact, the United States is expected to add 1 million barrels in additional capacity by the end of next year, another reason why the United States will remain the world's leading oil-producing nation.
So, what about the rest of the world? Hundreds of factors will influence the global oil markets in 2014, but no trends are bigger than these five.
Here's a look:
2014 Oil Investing Trend No. 1: The Texas Oil Boom Continues
Texas is the place to invest if you're looking to capture a reliable stream of energy profits in the year ahead.
Oil production in the Lone Star State increased another 18% in 2013, which followed a 35% increase in 2012. The state's total share of U.S. oil production has now gone from 18% in January 2013 to 40% today. The United States is now the world's largest oil producer, and Texas oil development has dominated the production boom.
In 2014, investment in Texas oil is only going to accelerate. Domestic production in other states is currently being hindered by infrastructure problems, and, of course, higher taxes. Tack on the favorable investment environment, vast shale fields, and proximity to refineries, and you've got yourself a nice big source of profits.
Investors should target midstream pipeline companies that provide producers greater access to the Gulf Coast refinery network and producers in the Eagle Ford and rapidly developing Permian shale fields.
2014 Oil Investing Trend No. 2: Renewed Iranian Capacity a Welcome to Global Markets
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.