A little over a year ago, our Global Energy Strategist discussed an intriguing project involving Tesla, a French renewable company, and the government of South Australia.
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Here's Where Oil Prices Are Headed (and Why There's No Stopping Them)
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Saudi Arabia isn't budging on oil prices.
In fact, they couldn't bring oil prices lower even if they wanted to.
Here's where oil prices are headed next...
How to Use Options to Play the Next Oil Wave
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Crude oil prices are rising again.
Much to the relief of oil investors.
The rise has been reflected both by the West Texas Intermediate, the benchmark used for futures contracts set on New York, and Brent, the equivalent set daily in London.
As of close of trade Sept. 19 – which happened at 2:30 for oil – WTI was at $71.12 a barrel, the highest since July 10. Meanwhile, Brent closed slightly higher at $79.23.
I have previously addressed the main reasons for why the price is moving up here in Oil and Energy Investor, and for some time now, the supply side of the market balance has been tightening.
Thanks to this, there is something interesting stirring in the oil sector – something that manifested in a recommendation to my Energy Inner Circle premium subscribers just a couple days ago.
One of My Favorite Drillers Is Set to "Strike It Rich" All Over Again
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The Delaware Basin in arid western Texas and southern New Mexico used to be a good deal more inviting than it is today.
In fact, around 300 million years ago, when the region was south of the Equator, the area was a lush, tropical reef teeming with Permian life, covered by the warm Delaware Sea, which was part of the ancient Panthalassa Ocean.
Nowadays, the fossilized remains of that reef are exposed in the hot desert air, and the once-aquatic landscape has given way to scrub and the national parklands of Carlsbad Caverns and the Guadalupe Mountains.
The area is also known for its vast, thick deposits of limestone…
… and shale. Virtually endless expanses of oil-rich shale – wellspring of the second American energy revolution.
And one company is in the perfect position to reap the rewards of this ancient treasure...
Here's Why Your Gas Prices Spiked This Summer
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The primary summer driving season is over, and Labor Day, the last vacation weekend of the season, is fast approaching.
Travelers are winding down their end-of-summer vacation plans as we head into the autumn, and traffic between cities is lightening.
Normally, this time of year produces a decline in retail gasoline prices as the driving season ends and autumn and winter hibernation begins. And refineries are already switching primary production cuts from retail gasoline to produce more low-sulfur heating oil for the upcoming colder months.
In this 2018 season, the expected adjustment downward is not kicking in as in years past.
So, why are we witnessing an unusual increase in costs at the pump?
"X" (Doesn't) Mark the $1.4 Trillion Spot in West Texas
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Sailing the oceans in search of treasure is something of a fantasy for a lot of people.
Just imagine it, the gentle rocking of the boat…
Learning the language of the sea…
Manning the big, wooden ship's wheel…
The eventual end goal: finding the buried treasure on the deserted island that you located using the ratty, ancient map with a giant black "X" marking the spot.
Usually this type of imagining involves a hook for a hand, eyepatches, peg legs, and other such pirate accessories.
But it's the buried treasure that's central to this dream.
Unfortunately, in real life, "X" marking the spot is just that… a dream.
There is, however, unmarked buried treasure.
You won't find it in the ocean though...
"King Shale" Will Mint a New Crop of American Oil Millionaires
Not that long ago, I'm sure you remember, the Organization of Petroleum Exporting Countries, better known as OPEC, controlled the international price of crude oil.
Given its effective control over more than 40% of all oil produced daily worldwide, how much (or little) the cartel decided to move into the market was the single biggest factor in setting the worldwide price.
In fact, in 1973, in the wake of the Yom Kippur War between Israel and the Arab coalition, OPEC was able to bring the West virtually to its knees, enacting an oil embargo by way of punishing major Western powers for their support of Israel in the conflict.
Of course, in those days, the United States was dependent upon foreign producers for almost 70% of the oil the country needed daily.
It had become both an economic and a national security concern, and "energy independence" was the preoccupation of American presidents going back to Richard Nixon. More than 60% of all domestic production was coming from stripper wells – wells producing fewer than 10 barrels a day each.
But then the combination of hydraulic fracturing and horizontal drilling ushered in a genuine "American energy revolution" in oil production.
The opening of shale (along with the broader tight) oil and natural gas production revolutionized the industry. Over the past decade, something truly unusual developed.
American domestic oil production became the balance for global supply and demand.
From barely 4 million barrels a day in 2008, extractions in the United States have now reached a record 11 million barrels, with some estimates expecting a rise to 12 million by 2020.
That would catapult domestic production into the number one position worldwide.
Then, as part of a budget agreement in mid-December 2015, Congress ended a more than four-decade prohibition on exporting U.S. crude to international markets. Just as the shale revolution was gaining steam, the added volume started moving out to higher-priced foreign markets.
American oil production has become the fulcrum on which international oil trade operates.
King Shale has been crowned. Let me show you what this means...
The U.S. Is Quickly Becoming the Biggest Oil and LNG Exporter in the World
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About 13 years ago, I was at a meeting of energy experts close to Dominion Energy's liquefied natural gas (LNG) terminal in Cove Point, Md.
At the meeting, it was unanimously concluded that at least 15% of U.S. natural gas demand would be met by LNG imports within the next decade.
In those days, nearly 70% of the U.S crude demand was projected to be met by imports.
At that time, American oil production was not even 7 million barrels a day, with well over 60% of total volume coming from "stripper wells" – each providing less than 10 barrels daily, but many more barrels of water than oil.
Back then, we were aware of the potential lurking in shale, tight oil, and gas…
But nobody could have foreseen (myself included) the largesse LNG would provide.
$100 Crude Oil? It Could Happen Sooner Than You Think
The two major global crude oil benchmarks – West Texas Intermediate and Brent – both saw solid gains this week.
Make a Killing from the Trade War While Everyone Else Focuses on the Headlines
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To be perfectly honest, the political saber-rattling these days has gotten a bit old.
It seems every day we're hearing news of another country threatening the United States with sanctions, tariffs, or just vague retaliation for comments from the White House.
And in response, the Twitter audience receives constant entertainment in the form of retaliatory rejoinders from our commander in chief.
But despite the relationship drama between the world's most powerful nations, it's still important to know what's going on.
If only to be properly prepared.
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