Watch This Oil Delusion Line Your Pockets With Cash

The media is absolutely delusional right now when it comes to oil. 

Well, most of it is.

I know you’ve seen and maybe even felt some of this frustration yourself. We even recently talked about the growing disconnect in the market between reality and narrative. 

But today, the delusion we’re talking about isn’t about the neverending battle being waged by the bulls and bears in the oil markets. 

No, today we’re up against something more fanciful and far more dangerous.

And all it took was just 41 words to trigger us:

There’s so much wrong here to unpack, let’s just start at the beginning. 

Global Oil Power HAS Shifted

The Wall Street Journal article that Cramer is referencing was far more accurate than the rest of his message. The idea is a simple one: The surge in U.S. oil output since the shale boom started has suppressed oil prices over the last few years is waning. 

The WSJ isn’t wrong. The fact that U.S. oil output grew by nearly a million barrels per day last year was a pleasant shock that few people saw coming; I was certainly taken by surprise. 
Our production grew from 12.5 million barrels per day last January to a record 13.3 million barrels per day by the end of the year. 

This growth has led to a boatload of delusional projections, including Cramer’s suggestion that U.S. oil production could easily climb to 15 million barrels per day today (if it weren’t for those greedy oil companies). 

You see, it was that ability to raise production that gave the U.S. so much power to keep a lid on prices… that, along with the unprecedented release of half of our strategic reserves.

And make no mistake, we’re very close to that production ceiling right now. 

Even the most pessimistic oil bears out there understand that the wind has left our sails, and output is flattening. At least, it will for a little while before making a few meager increases over the next couple of years. 

But 15 million barrels per day? Without much of a problem?

That idea is utterly ridiculous. 

Let’s forget the fact that oil companies are currently drilling under one of the most anti-oil administrations in U.S. history. Unless anyone has forgotten, one of his 2020 campaign promises was “no new drilling, period.”  

You can’t get any more hostile than that, can you? 

But it was more than words that cut the oil and gas industry deep. This is more than just angry tweets hoping to score a few political points. 

Remember, President Biden tried his best to follow up on his anti-oil rhetoric by offering the fewest offshore oil and gas lease sales in a five-year plan. Caving to activist pressure, the BOEM tried every trick in the book to prevent new drilling. 

Ultimately, this all just created a ton of uncertainty for oil companies that need to make decisions on whether to go forward with multi-million dollar investments. 

But hey, let’s push aside this, too. 

After all, the Biden administration did auction off nearly 1.7 million acres for drilling in the Gulf of Mexico at the end of the year (pay no attention to the fact that it would be the last lease sale until 2025). 

Unfortunately, one of the biggest drivers for oil production in our now-famous tight oil plays is that you need to drill — a lot. 

We’re simply not doing that. Taking the latest Baker Huges rig count into account, there are 139 fewer rigs drilling for oil and gas on U.S. soil than there were a year ago. And that number has declined dramatically over the last few years. 

Believe me, you don’t need to be a market analyst on CNBC to realize that it’ll be nearly impossible to significantly raise production without more rigs in the field. 

But I won’t leave you without a little optimism. 

Despite all the delusional logic being disseminated by the media over a cheery future for U.S. oil output, there are opportunities out there for individual investors like us. 

You see, the days of wild surges in production may be over, but that doesn’t mean there aren’t opportunities out there right now. 

Today, the name of the game isn’t about drilling as many holes into the ground, but rather how effective you are at extracting that crude. 

That’s where the value is today. 

And if you don’t believe me, I suggest you 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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