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Dr Kent Moors

Oil

We're in Uncharted Territory for Oil

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The meeting in Vienna last week among OPEC members and their non-OPEC allies, OPEC plus, was intended to help nations reach an agreement on production cuts to extend past the current end date of April 1.

The concern is the spread of the coronavirus will drive down the price further as global economic demand slows. But Russia was not on board. And the Saudis' response to Russia's stance was to cut its price to Chinese customers, and plan to increase production by as much as 2 million barrels per day. That fallout then led to oil's massive 30% nosedive. And on Monday, oil's decline was literal fuel to the stock market fire, causing it to fall 7.79% in one day. Since Monday's losses, both oil and the stock market have recovered a bit. Oil is sitting at around $33 a barrel and stocks rallied at open.

But unless there's a resolution, we will be retesting the market lows that we experienced in 2015 and 2016, when oil dipped below $30 per barrel and we'll see a ripple effect through the economy that's going to have a parallel impact to the COVID-19 problems we already have. Here's Kent with the details...

Energy

The Easiest Way to Cash In on the Entire Energy Sector in 2020

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Energy abundance – from multiple sources – is about to unlock staggering gains for investors.

But if you just "play the majors," you may find yourself with less than your fair share.

With a few rare exceptions, the windfall profits in the months ahead will be reserved for a handful of small niche companies poised to become the biggest winners as energy truly goes global.

Make no mistake: You will make more money in energy investments over the next several years than in any other sector and during any other period in your lifetime.

And now you won't have to fret over what this new market means, what elements are driving it, or what to invest in.

Read more...

IPOs

Why the Aramco IPO Doesn't Impress Me... Yet

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Trade on the Tadawul, the local Saudi Stock Exchange, began today for the largest initial public offering (IPO) in history.

Following the initial trading, Saudi Arabia has touted the IPO in mega state oil company Aramco as a success.

And at a glance, this assessment appears to be on target.

The first major success is this: It happened. For the first time the Saudis have allowed private ownership of a state-run enterprise, although admittedly less than 2% of it.

Then, there is the valuation. Selling 3 billion shares at 32 riyals ($8.53) each amounts to $25.6 billion. That makes this IPO the largest IPO in history, eclipsing even the float of Alibaba back in 2014, which was valued at $21.8 billion.

It also puts an overall value on Aramco of $1.7 trillion, making it, once again, the largest ever seen and close to the $2 trillion initially projected by Crown Prince Mohammad bin Salman prior to the first abortive attempt at an IPO over two years ago.

In addition, global interest may well increase the number of shares available from the placement. Currently, the number of shares amounts to only about 1.5% of the company. That could increase to about 2% if an option to sell additional shares is exercised. And there is some evidence that the outside interest is growing.

However, despite all this positive success, the downside of this IPO didn't take long to emerge...

Oil

What Every Investor Needs to Know About the Saudi Arabian Oil Attacks

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I was still in the air with my wife, traveling between Dubai and our home in Florida, when some of the world's most important oil production and processing facilities in Saudi Arabia were attacked by drones.

By the time we landed, the massive Saudi Aramco processing facility at Abqaiq and the Khurais oil fields were burning, around 7% of global daily crude production was falling offline, and global crude prices were spiking by double digits.

At home, before I even had a chance to unpack, I participated in a marathon series of overseas conference calls which have only just ended.

With the attack, claimed by Houthi rebels out of Yemen, the long-simmering Saudi-Iranian proxy war has reached a new, volatile boil.

Frankly, White House rhetoric notwithstanding, Saudi Arabia's next steps will largely determine when and where outright war breaks out.

I can say with certainty, however, that U.S. and Saudi government responses to the global oil market have missed the mark.

Here's what's really happening...

Oil

How I Predicted the Attack on Saudi Arabia's Oil Infrastructure

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Our Dr. Kent Moors is going to give you an in-depth look at all the moving pieces in the recent Saudi Arabian oil attacks and what led him to predict this very incident way back in May.

Read more...

China

We Could Be Looking at War in the South China Sea

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Many people would do anything to have a crystal ball into the future.

You could see if you're going to get that dream job…

You could find out what your children will become when they grow up…

You could know where you'll be when you retire.

The possibilities are endless if you could see the future.

Many of my colleagues, if asked the question of what they would do if they could see the future, would say that they would like to look at the financial markets and pick the best trades to make them rich.

I'd say that's a popular choice.

But for me, if I had such a power, I would be looking at more than just the financial markets.

There are many factors involved in what makes a particular company a good trade, and much of it depends on geopolitics.

So, if I had a crystal ball, I would be looking at the geopolitical situation only a few months into the future.

On the other hand, with today's geopolitical tensions, I don't think I really need a crystal ball to tell me what's going to happen.

In fact, all I really need is a history textbook...

Oil

What Every Investor Needs to Know About the Gulf of Oman Oil Tanker Attacks

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Oil prices spiked after the recent Gulf of Oman oil tanker attacks, but then prices have drifted lower ever since.

That means investors think this was an isolated incident. It wasn’t.

So it's absolutely critical that you understand what's happened here - and what's likely to happen again...

Oil

Oil Prices Should Be Going Up - Here's Why They're Not

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As I write this, oil prices are retreating (again) and approaching two-month lows. This decline is underway despite some rather heavy supply pressures that should be moving it up.

Thus, the question is: Why?

The overall dynamics would seem to indicate higher prices:

Things like the reimposition of U.S. sanctions against Iran; a continuing collapse in Venezuela; widening impact from a festering civil war in Libya; a Russian export suspension mess on the world's largest pipeline remaining unresolved; an OPEC+ emphasis on production restraint; extraction problems in Mexico; and even discount pricing spreads in Canada have moved supply concerns to the front burner.

And that's just the warm-up.

Now, all this needs to be put in perspective...

Oil

What You Need to Know About the Oil Price Comeback

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The price of crude oil is renewing an upward march.

I've said it before, and I'll say it again. It's quite the breath of fresh air after the collapse we experienced at the end of last year.

As of trading close yesterday (2:30 PM for oil in New York), West Texas Intermediate (WTI), the benchmark crude rate written in New York, was up another 1.6% for the day, 5.3% for the week, and 10.6% for the month.

Year to date (YTD), WTI is up a hefty 37.8%.

Meanwhile, Brent, the more widely used global benchmark set daily in London, is better by .5%, 2,4%, and 5.4%, respectively, with a YTD gain of 28.9%.

Of interest now is the Brent-WTI spread, the difference between the two benchmark figures...

Washington

While Trump and Putin Kick Off "Cold War 2.0," This Stock Will Soar

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Over the past year, I've recommended some profitable direct military and defense plays for my Energy Advantage, Energy Inner Circle, and Micro Energy Trader subscribers.

The connection between energy and global geopolitics might not seem obvious, but it is very real. It's very profitable, too, as you'll see with the choice investment pick I'm going to share in a moment.

Each time I've recommended a defense or military play, energy markets have provided the reason, whether through security reasons impacting energy sources and transport, or energy technology breakthroughs that directly benefit the defense sector.

The South China Sea, "off-the-grid" power systems, North Korea, Iran – developments in all these places and more have delivered consistent profits.

And over the past week, a ratcheting up of geopolitical tensions has compelled me to share a recommendation previously reserved for my paid subscribers with everyone...