If you’re not bullish yet on oil in the long run, it’s time to ask yourself why.
If someone is trying to feed you a line that oil demand is crashing, falling, or even slightly waning, you’re better off checking the numbers for yourself.
After all, it was only recently that the IEA reported global demand was on the rise. It revised its latest demand growth numbers by 90,000 barrels per day and now expects consumption to average 93.6 million barrels per day this year.
And although demand growth in the United States is expected to be stagnant over the next few decades, let’s not forget that demand has been steady since the early 1970s:
Click Chart to Enlarge
Remember, we’re still talking about more than 19 million barrels of petroleum products every day!
Across the Pacific, demand for crude in China jumped 6.5% in March compared to a year ago, averaging 10.58 million barrels of oil per day. During the first quarter of 2015, it was up 7.7%.
Normally, this would be good news for King Salman and the Saudis.
The only problem is that OPEC is entrenched in a bitter bout of sibling rivalry.
OPEC Self-Destructs in 3… 2… 1…
Saudi Arabia may be leading airstrikes in Yemen, but the country is under attack on another front. At risk aren’t its planes, tanks, or even its soldiers — it’s the country’s grip on the world’s oil markets.
This time, Saudi Arabia’s enemies are coming from within OPEC.
It turns out the oil cartel isn’t exactly a pristine example of brotherly love.
Shocking, right?
First understand that to the Saudis, market share trumps any friendship or OPEC bond. And right now, the Saudis are fighting two fronts: Not only do they have to contend with potentially millions of barrels of oil that Iran will soon unleash onto global markets, but they are also waging an oil war in the Gulf of Mexico.
If I didn’t know any better, I would think the Saudis are trying to force Venezuela out of the oil business.
Consider that 92% of Venezuela’s oil exports to the U.S. are shipped to refineries along the Gulf Coast. Make no mistake; those refineries are one of the few places that can handle the extra heavy crude oil from Venezuela’s Orinoco Belt.
The Gulf Coast is also the destination for approximately 60% — nearly 600,000 barrels per day — of Saudi exports to the U.S.
And while OPEC is plagued with internal strife, you might want to shift your attention towards home… because you don’t want to be left out of the upcoming oil rebound.
You see, not only are the Saudis at war with OPEC, but they also have to contend with drillers in the U.S., which have helped boost domestic output to more than 9 million barrels per day.
Our timing couldn’t be better, either…
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One Shale to Rule Them All
My colleague Christian DeHaemer and I have been known to get into a row or two in the office. As one of my cubicle cellmates, he spouts a wide array of opinions over particular investments or trends.
So it goes without saying that we’ll butt heads from time to time when a disagreement arises.
Today, however, was a little different.
Chris has been known to take a bearish perspective on crude oil in the past, so when he started asking who would rally the most when oil prices rise, I was thrown off guard. But it’s hard not to agree after seeing crude prices surge since mid-March:
Yet even with such a strong move higher in oil prices, he still seemed a little hesitant. Truth be told, I can’t rightly blame him. Anyone with a dime in the oil sector has felt the sting of crashing oil prices during the latter half of 2014.
“You’re not worried the same thing will happen again?” he asked, peering over his monitor.
To be perfectly honest, I wasn’t fazed one bit.
“Worried?” I replied. “Oil prices crashing last year have created a buying opportunity not seen since 2009, when oil plummeted to $33 per barrel!”
Still, for all my excitement, it’s easy to understand anyone’s hesitation to go all-in on certain oil stocks, many of which carry a higher degree of risk.
And that’s exactly where this single oil investment comes into play.
You see, the inevitable crude oil rally that looms ahead for the second half of 2015 will be a huge boon for this select group of shareholders — without taking on a ton of risk.
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.
