I wasn't more than 30 minutes outside of D.C. the other night before my cell phone started ringing.
The calls involved breaking new developments overseas that promise to have a big impact on the global energy markets. They concerned a major global energy situation that is likely to create a domino effect that will have consequences for U.S. domestic policy.
I wasn't more than 30 minutes outside of D.C. the other night before my cell phone started ringing.
The calls involved breaking new developments overseas that promise to have a big impact on the global energy markets. They concerned a major global energy situation that is likely to create a domino effect that will have consequences for U.S. domestic policy.
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As I wrote up this analysis of the best investments in oil, a familiar saying came to mind: "Everything old is new again."
A truer statement could not be said about the Permian Basin, which is a geological formation roughly 300 miles long and 250 miles across that stretches across west Texas and eastern New Mexico.
After banking some very hefty profits for Energy Advantage and Energy Inner Circle subscribers on refining stocks earlier this year, the entire sector now is about to land "between a rock and a hard place."
Once a high-flying place for investors to earn substantial profits, refiners have been under pressure for the last two months. But that's actually just the beginning of what's to come.
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I have been "in the field" for the past several days and will be back in circulation later this week. But I wanted to send you a note on what's been taking place recently.
The last two trading sessions have seen a spike in oil stocks. The rise has been focused on companies that provide services to early-stage field development, as well as for crude production.
Now, we have witnessed a similar "summer pop" in each of the past three years. It tends to signal a rise in expected medium-term demand for both crude oil and oil products.
However this time around, the improvement isn't reflected in companies across the board, but rather in those emphasizing geographically specific field plays.
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Investors searching for how to invest in oil in 2013 should be focused on these latest developments from the Arctic.
In fact, countries are racing to get a piece of what could be the final frontier for oil...
As ice melts in the Arctic region, oil and gas trapped beneath the water becomes more accessible.
Money Morning Global Energy Strategist Dr. Kent Moors recently explained to Money Morning members about the search for Arctic oil and gas.
He spoke about the years-in-the-making U.S. Geological Survey's Circum-Arctic Resource Appraisal. The study found that 84% of the total undiscovered oil and gas left on the planet is located above the Arctic Circle, mainly offshore and in three huge basins that lie under shallow seas.
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As gold loses some of its luster, Dr. Kent Moors explains why crude oil has become a much better reflection of stored market value. Read more...
Today (Wednesday) an analyst from Citigroup became the latest lemming to declare the death of peak oil.
In a report entitled "The End is Nigh," Seth Kleinman says a combination of flattening demand and rising supply will cause oil prices to slide slightly by the end of the decade to $80-$90 a barrel.
But while oil companies have made many large new discoveries over the past few years, including big shale oil finds in North America and Australia as well as deepwater finds in the Gulf of Mexico, that doesn't mean oil prices will fall.
In fact, according to Money Morning Global Energy Strategist Dr. Kent Moors, it's far more likely that oil prices will continue to rise over the next decade.
Moors points out what most other analysts seem to be missing - that all of the new oil finds present many challenges that will add to the cost of extraction.
"None of this new volume is light, sweet crude," Moors said. "The average wellhead costs continue to go up, and that moves its way downstream to processing, wholesale, and retail."
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The doomsayers are once again predicting a crash in oil prices. These oil price bears must really be getting desperate. Dr. Kent Moors explains why oil is only going up.
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Despite some 300B barrels of oil reserves, the nation has failed to unlock the profit potential within its borders. But news of President Hugo Chavez's passing this month has sparked speculation that it's time for an energy renaissance.
Traditionally, size has determined the impact and profitability of an oil company. But today the stage is set for smaller, well-positioned companies. Energy investors should keep an eye on these "non majors." Here's why.
Today I've got new information on what could be the largest shale oil find ever recorded - an estimated 233 billion barrels of recoverable shale oil.
This has got the entire energy world abuzz.
That's more that all of the oil in Iran, Iraq, Canada, or Venezuela. And it’s just 30 billion barrels shy of all the reserves in oil-rich Saudi Arabia (or at least what they claim to have).
It's a very exciting find for the (surprising) country where it was found. It means decades of energy independence. Not only that, but the nation will probably begin to export oil in the next few years, too.
But it's perhaps even more exciting for investors. You see, one small company controls what is shaping up to be the biggest worldwide oil project to hit in 40 or 50 years. And they won't be the only ones who get rich from this. Far from it.
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The purchase of Calgary-based energy company Nexen Inc. (NYSE: NXY) for $15.1 billion by China's CNOOC Ltd. (NYSE ADR: CEO) is the largest overseas purchase ever by the world's second-biggest economic power.
But it will likely be the last time China, or any other country, takes a big chunk out of Canada's oil sands - the world's third-largest proven reserves of crude oil.
That's because after Canadian Prime Minister Stephen Harper approved the Nexen deal in December, he banned further foreign firms' investment in Canada's oil sands and will allow them only under "exceptional" circumstances.
"The government's concern and discomfort for some time has been that very quickly, a series of large-scale controlling transactions by foreign state-owned companies could rapidly transform this [oil sands] industry from one that is essentially a free market to one that is effectively under control of a foreign government," Harper said in December.
"Foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada," he added.
But foreign government control isn't the real problem facing Canadian oil sands companies.
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The upward pressure on prices is building, reflecting higher revisions in forecasted demand. And this week we got two "outside" signals that mean more volatility ahead.
These days everybody wants to extol the virtues of rising U.S. domestic crude oil production.
From decades of increasing reliance on foreign providers, some hardly sympathetic to American interests, the new prospect of having significant unconventional oil reserves here at home has been a major development.
The assumption advanced says that domestic sources will be cheaper. As a result, this should comprise a positive boon to consumers of oil products but a problem for producers and refiners. In short, the mantra among some commentators is to proclaim the end of the oil market as an attractive option for investors.
As with most such simplistic observations, however, it turns out not to be true.
A number of these "analysts" are actually talking down the prospects of oil prices because they have already shorted the commodity and will benefit their own investments if they can continue the downward push.
Well, oil prices are now going up, with both West Texas Intermediate (WTI) in New York and Brent in London at more than three-month highs.
In addition, the spread between WTI and Brent is narrowing.
The narrowing of that spread is occurring while both benchmarks are rising in price. The mantra of the pricing doomsayers would expect it to be going in the other direction.
There are two broad categories of reasons why matters are not happening as the doomsayers had expected (aside from the obvious - they misunderstood the dynamics from the beginning).
And once you understand both, you'll be in position to profit as prices continue to rise.
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