Crude Prices

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This $600 Million Oil Market Shift Is the Biggest Signal the Crunch Is Over

oil prices

Oil "sages" everywhere are now calling for $40 to $50 a barrel of oil by mid-year, calling on vague rumors of a Saudi-Russia production deal, costly shale oil producers collapsing, or the energy debt crisis as proof.

But they're overlooking one crucial thing - the main signal that oil prices are turning around. You see, the largest move of its kind ever just took place in oil markets... $600 million worth in one day.

Pundits may have missed it, but that doesn't mean you have to. It's a clear sign that oil prices are turning around - and that it's time for you to get back in the game...

An Oil Price Forecast for the "New Energy Age"

opec

The oil price forecast calls for higher crude ahead, but not enough to save the day. The pivotal issue of the cost per barrel has taken a back seat to a more crucial issue at hand.

One that could lead to a more protracted fiscal crisis in the future. Because, while under the "old rules" oil prices could move up to meet budgetary needs.

But that's not the case anymore. Here's what it means for oil prices down the road...

Natural Gas Stocks Ready to Surge on Demand from Asia

Ramped up production and ample supply have weighed on natural gas prices over the past year, pressuring natural gas stocks.

But news out of Asia this week delivered support for a long-term bull market for natural gas.

The International Energy Agency (IEA) reported Tuesday that worldwide demand for the fossil fuel is expected to increase some 17% over the next five years, thanks in a big way to China.

Despite recent signs of a slowing economy in the Asian nation, Chinese consumption of natural gas is expected to double during the period, according to the IEA. China's demand for the fuel is forecast to grow 13% a year through 2017.

"Asia will by far be the fastest-growing region, driven primarily by China, which will emerge as the third largest gas user by 2013," the IEA wrote. "There are no doubts that China will become a major importer of gas. The question for external suppliers is how much pipeline gas and LNG China will need in five or 10 years."

North American natural gas companies are poised to benefit the most from the surge in Asian demand for the fuel. The region is positioning itself to become a major net exporter of liquefied natural gas (LNG) over the next five years as new projects come on line, the IEA said. The agency added that Asian LNG producers, such as Malaysia and Indonesia, stand to become net importers as local demand balloons and output wanes.

China won't be alone in increasing demand. The IEA estimates U.S. natural gas consumption will increase 13% by 2017, and European demand will grow by 7.9%.

By 2017, the agency says, low natural gas prices should lead to gas generating almost as much electricity as coal in the United States.

"The continued boom in unconventional gas in the U.S. may even herald the end of the hundred-year dominance of coal in U.S. power generation. In 2005, when the first shale well was fractured, coal produced almost three times as much power in the U.S. as gas. By 2017, the race will be almost even," the IEA reported.

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Gas Prices Spike: Ease the Pain of $5.00 Gas with UGA, USO, COP, XLE

February is typically a month when gas prices recede - but not this year.

Average gas prices currently are about $3.69 according to AAA's Daily Fuel Gauge Report. That's higher than the average for the whole of 2011, which was the priciest year ever for gasoline.

The average price for U.S. gas has climbed more than 10% in just the past two months. This suggests a trajectory that could produce a spike of 60 cents a gallon or more by May.

"I actually believe that prices will be moving higher than 60 cents a gallon on average," Money Morning energy expert Dr. Kent Moors recently told Executive Editor William Patalon III. "By mid-summer, in fact, we could see $5 a gallon being reached in certain regions of the U.S. market."

Here's why we could be facing the most painful year at the pump - and how you can offset record-breaking gasoline costs.

What's Driving U.S. Gas Prices to $5 a Gallon

Usually, higher gas prices result from low supply and high demand, but that's not the case this year. Even with consumption growing in emerging markets like China and India, the current surge in gas prices isn't based on increased demand for crude oil.

In fact, according to Tom Kloza, chief oil analyst for the Oil Price Information Service (OPIS), demand for oil is at its lowest point since April 1997.

Instead, there are a new set of factors pushing U.S. gas prices higher, including:



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Occidental Petroleum Corp. (NYSE: OXY): The Best Way to Profit From the Monterey Shale

It has been a long time since California seen a profit opportunity like this.

The state's Monterey Shale formation may hold as much as 500 billionbarrels of oil making it more valuable than the gold rush of 1848.

With oil prices expected to hit $150, if not $200 a barrel this year that means the profit potential is limitless.

After all, peak oil isn't a myth - it's a reality.

Traditional oil production is plateauing, while demand in emerging markets continues to rapidly increase.

Meanwhile, turmoil in the Middle East has threatened supplies even further. And the war with Iraq didn't end up being the energy bonanza many thought it would.

And now the Arab Spring and tensions in Iran have escalated to the extent that military intervention there seems to be a foregone conclusion.

That's why the Monterey Shale - a rib-shaped formation that extends from Northern California down through the Los Angeles area and then offshore to outlying islands - is getting so much attention.

And unlike other shale plays in the United States, the Monterey is primarily oil, not gas.

That means Monterey shale does not require hydraulic fracturing, which has come under fire from environmentalists.

It also means companies can extract much of the oil using simple vertical wells, rather than the more expensive horizontal drilling needed for shale gas plays. Some horizontal drilling will be used, but it is not required in all fields, greatly reducing operating expenses.

In fact, in large parts of the formation, production costs are less than $10 a barrel.

Think about what that means for profit margins with crude prices currently near $110 a barrel.

So how can investors profit?

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Energy Investors Pocket Profit on Oil Price Rally - And It's Just the Beginning

Investors in energy stocks are enjoying an oil price rally that continued for a fifth trading session yesterday (Tuesday), pulling many oil-related investments up with it.

U.S. oil futures rose 40 cents to $85.81 a barrel on the New York Mercantile Exchange (NYMEX). Black gold has climbed 12% since hitting a 52-week low of $76 a barrel last week - a 37% fall from its April high near $120 a barrel.

Brent crude oil futures rose 1.6% to $110.73 a barrel for a five-day gain of 11% -- the biggest since August 2009.

This week's gains follow on the heels of a recent slump - but subscribers to our Private Briefing service knew this would be the case.

We forecast the oil markets short-term pullback in our early Private Briefing columns and told investors to take advantage of the crude oil sell-off while energy stock prices were low.

Sure enough, these recommended stocks are climbing as oil prices are once again on the rise:

  • The oil-related stock we highlighted it Aug. 12 in "How to Profit From $120-a-Barrel Oil ..." is up 2.7% from that day's closing price.
  • The high-return energy play our Global Macro Trends Specialist Jack Barnes detailed on Aug. 19 in "The Energy Stock to Buy Now...", is up 14% this week.
  • And the favorite low-risk natural gas stock that resources specialist Peter Krauth shared Sept. 15 in "A "Dream Pick' in the U.S. Energy Sector", has gained 4.2% during the oil futures five-day price rally.
Executive Editor William Patalon III checked in this week with global energy expert Dr. Kent Moors, who gave an update on the latest profit opportunities and oil price outlook - as well as a juicy new stock pick.

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Second Quarter Forecast: Three Predictions, Three Ways to Profit

With the first quarter of 2011 behind us, there's a lot to take away and learn from - especially when it comes to the direction of oil prices, interest rates and stocks.

Granted, we're right now navigating one of the most uncertain periods in modern global history. But if you're a trader or an investor, knowing how markets have been reacting to recent news and events provides you with some valuable insights that you can use going forward.



And after we address each of these three topics - oil prices, interest rates and stocks - we'll be able to recommend some specific moves that investors should consider.

So let's look at each topic more closely.

For three ways to profit from these trends, please read on...

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$130 Oil Could Be Just the Beginning as Libya Crisis Intensifies

With rising violence in Libya looking increasingly like a war, the head of Libya's national oil company said yesterday (Wednesday) that crude prices could reach $130 a barrel within a month.

But that may be just the beginning, as other analysts have raised fears of oil prices topping $200 and even $300 a barrel.

"The oil market is very sensitive," Shokri Ghanem, chairman of Libya's National Oil Corporation, told Reuters. "Speculation is very important for the market. When you see that production in an important country went down you are afraid it will go down even more."

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$150 Oil: Four Ways to Profit as Crude Prices Rocket

Crude oil is about to skyrocket in price.

In fact, I believe we'll be looking at $150-a-barrel oil by mid-summer.

For most U.S. consumers, higher oil will equate to higher expenses, and a bigger drain on the household budget.

But for investors who understand where to look, these higher crude prices represent a substantial profit opportunity - one that will eradicate any concerns you have about higher household expenses.

And I can tell you precisely where to look.

For the sectors to watch, and profit plays to make, please read on...

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