Oil Prices Today Lead to Oil Profits Tomorrow

Oil prices today will lead you to oil profits tomorrow. 

This is a rather special week for oil prices. Last time, we talked a little bit about the importance of Memorial Day weekend when it comes to oil markets. For some in our investment community, the nice 3-day weekend is the highlight of our year and marks the beginning of a bullish cycle for oil prices. 

Of course, your joy during the summer months may depend on what type of investor you are. 

For the investment herd — those poor unfortunate souls that are always late to the party and move into stocks like cattle — it’s a time when they start to look for the hottest oil stocks to buy. 

For us, summer can be a time to harvest the oil profits that we’ve been patiently cultivating for months, watching our portfolio bloom right alongside oil prices. 

And if you look closely, you’ll catch a few signals on this bullish feeling in the oil sector. 

You just have to know where to look… All you have to do is beat Big Oil to the punch.

The Great Oil Consolidation Continues

Big Oil is getting hungry again. 

Last year, I told you that the ‘Great Oil Consolidation’ was coming in 2023. Not only did that come true, but it turned out to be one of the biggest years for M&A activity in a decade. 

Go ahead and take a look for yourself:

If you’re wondering just how big it was, consider that oil and gas E&P companies spent $234 billion. Now, I’ll be the first to confess that a lot of this spending was on just a handful of deals. 

And I’m sure you’ve seen them hit media headlines as these deals start to close. After all, Exxon dished out $64.5 billion acquiring Pioneer Natural Resources, and Chevron’s buyout of Hess came with a price tag of $60 billion. 

Even the Oracle from Omaha’s oil cash cow, Occidental Petroleum, announced it was shelling out $12 billion to buy Crownrock last December. 

Like I said, Big Oil couldn’t get enough, and they were absolutely flush with cash after two incredibly profitable years. 

So what on Earth would make you think they would want to stop in 2024?

Beating Big Oil at Its Own Game

One thing for sure is that we didn’t have to wait long for the M&A activity to start pumping out deals this year. 

A few days after the ball dropped in Times Square, Apache Corp. made a $4.5 billion move to acquire Callon Petroleum. That name should ring a bell for my veteran readers. It was one of the three ways we were looking to strike Texas oil profits (on an interesting note, Pioneer Natural Resources was at the top of that list back then). 

Soon after, Chesapeake Energy went after Southwestern Energy in an all-stock deal worth $7.4 billion. 

Then within a month of that, we saw Diamondback Energy make a play for Endeavor Resources for $26 billion. 

The great oil consolidation had not only begun, it was gaining momentum!

Driven by the deal for Endeavor, M&A activity in the global oil and gas industry reached more than $64 billion by April, 2024, with $54 billion of that taking place in North America. 

And if you follow the money trail, all roads lead to one place: The Permian Basin. But that’s not really surprising to you, is it? We’ve been touting the value of the Permian Basin for years, and today the region is responsible for nearly 6.2 million barrels of oil production every single day — almost half of the entire daily output of the United States!

However, the hard part isn’t knowing that Big Oil is going to get greedy and scoop up the best E&P players in the Permian. Remember, that’s how companies like Exxon have to grow — by unloading its massive war chest rather than through the drill bit. 

In other words, Big Oil’s oil option is to open up its coffers and swallow up the best assets it can get its hands on. 

And sometimes — just sometimes — you come across a hidden gem in deploying a new drilling technique that is not only more efficient at getting oil out of the ground, but is also just sitting there waiting to be plucked up… for the right price. 

That’s a deal too good to be true for Big Oil. 

You gotta check this one out for yourself.

Until next time,

Keith Kohl

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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.

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