Recall early last year when oil prices were around $100 per barrel…
Oil prices sent shares higher than they’d been in years, and individual investors who raked in gain after gain were thrilled.
Shale oil stocks such as Continental Resources (NYSE: CLR) took the markets by storm and crushed the run-of-the-mill “Big Oil” stocks that Wall Street has shoved down our throats for decades:
Don’t get me wrong; Big Oil companies like Exxon (NYSE: XOM) and Shell (NYSE: RDS) still made out pretty well too, as you can see above. But it was Continental and other shale industry pioneers that made fortunes for regular investors.
Of course, not everyone was thrilled…
In January of last year, Saudi Prince Alwaleed bin Talal begged the powers that be within the Kingdom to address the threat of U.S. shale oil.
Bin Talal, a billionaire businessman, went so far to call the situation in the U.S. a “matter of survival.” He went on to say that if North America were to continue oil production unhindered, Saudi Arabia would fall into dire circumstances.
He was right to be worried. 92% of his country’s budget comes from oil exports, and Bin Talal’s comments now feel like a premonition for the rest of 2014.
By the time the year was out, Saudi Arabia forced price cuts for global oil. Instead of cutting production to prop up prices, the Saudis flooded the world with crude, creating the glut that led to our low oil prices today.
But from where we stand now, it’s not all bad. In fact, the manipulation by Saudi Arabia has created a profitable opportunity for investors…
Oil Prices are Rising
Over the last few months, oil prices have recovered some of the losses we saw during the throes of the bear market in December and January…
Both Brent crude and West Texas Intermediate, pictured above, have risen over $60 per barrel, and as these prices continue to surge, investors will see the stock prices of oil and gas companies surge, too.
The question on everybody’s lips has been whether this surge will take us back to $100 per barrel or if prices will fall once again…
By the evaluation of our research team at Energy and Capital, it would seem the former is true, and we are on our way to $100 per barrel.
The Saudis are waging airstrikes in Yemen as Iran-backed rebels attempt to wrest control from the Kingdom in the region.
U.S. oil companies like Baker Hughes (NYSE: BHI) and Schlumberger (NYSE: SLB) have cut jobs and slashed expenses so they can offer drillers cheaper tools and services.
Said drillers have gone on cost-cutting campaigns where they run drilling rigs but wait for higher prices to complete the wells and extract the oil.
And in response to cheap gasoline at the pump, American drivers rushed to car dealerships in the last six months to buy SUVs and trucks. AutoNation, the largest automotive retailer in the U.S., saw its best quarter in a decade at the end of 2014 because of heavy-duty vehicle sales.
American drivers are about to send demand back through the roof, and oil prices will respond accordingly.
Let me be clear: This won’t happen overnight. Heck, it probably won’t happen until early next year.
But by the end of 2015, oil prices will be near $80 per barrel, and the lion’s share of easy gains on the open market will be lost.
You see, the last time oil prices were this low, you could’ve thrown a dart at a list of oil stocks, bought the one you happened to hit, and made a fortune.
Now, with prices low again but heading higher, history is going to repeat itself, and the low-hanging fruits still linger for us to buy… but not for long.
Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
A $1 Stock in Texas You Need to See
A report from the University of Texas predicts Texas shale formations alone will make up one-third of the global oil supply within 10 years.
Yes, you read that correctly: One-third of global oil production will be coming from Texas.
And if you think the report is just hype, think again…
In West Texas alone, there’s a new formation I’ve dubbed “the Petroplex” that may hold as much as 100 billion barrels of oil. A formation that size would be the second-largest oilfield ever discovered on the planet.
That’s what the CEO of Pioneer — one of the first major drillers to buy large acreage blocks in the Petroplex — said in an interview recently:
“We believe [the Petroplex] will reach 100 billion boe recoverable reserves at some point in time [and it] could possibly become the largest oil and gas discovery in the world.”
Now, maybe you think the CEO of Pioneer is biased, since his company has a big stake in the region.
But here’s what Forbes reported…
“… the region [Petroplex] is producing more oil than the pipelines can handle…” and “New infrastructure is being laid to send oil from the Petroplex straight to the refinery center in Houston…”
And CNBC said:
“Oil flows like water in the Petroplex.”
And it’s about to get even bigger.
I recently completed extensive on-the-ground research of the Petroplex, and I found a little-known company trading for less than $1 that’s producing oil in the area.
The report I wrote on the company shows you exactly where the Petroplex is, the companies drilling for oil there, and specific details on the small $1 driller ready to hit the big time.
If you want to make money when oil prices return to $100 per barrel, this will be the absolute best way to do it.
Until next time,
Keith Kohl
Check us out on YouTube!A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.
