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Peak Oil is You


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Page added on January 13, 2018

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Buy Oil, Make Money

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The last time I got into a row over oil prices with Christian DeHaemer, the U.S. oil industry was in a far different state.

It was years ago, before the Bakken in North Dakota became a household name.

Back then, our shouting matches would reach a crescendo in the office, and he just happened to always take the opposing position.

When I suggested in early 2007 that oil was about to make a run to $100 per barrel, he started rattling off a dozen reasons why it was about to head to 10 bucks.

And he did it with a smile.

Ah, but those were much simpler days, dear reader… when you saw the words “peak oil” more than you do Bitcoin today.

So you can probably imagine my surprise this morning when I overheard my favorite cubicle cellmate here in Charm City mutter something about $90 oil under his breath.

“That’s not what the EIA is calling for,” I couldn’t help saying.

When he looked up and saw me glancing his way, we both immediately knew who was wrong this time around.

“Actually,” I continued, “their forecasts are predicting crude to be completely flat in 2018.”

“I take it back then,” he replied. “It’ll hit $105.”

“Well, 12 months from now, somebody is going to be right, and somebody is going to be ashamed,” I answered.

He’s right.

And I have a feeling the EIA will have a little egg on its face by this time next year.

Here’s why…

Oil Profits 2018: Flat or Full

Yesterday, the EIA’s Short-Term Energy Outlook predicted that Brent crude prices would average $60 per barrel in 2018 and $61 per barrel in 2019.

image1eiaprices

Its premise was simple enough.

OPEC would keep a tight lid on output this year, with production from the oil cartel increasing slightly this year by around 200,000 barrels per day.

But if you and I are going to be honest with ourselves, they’ll be lucky if that happens. While it’s true that countries like Saudi Arabia can turn on the taps, other members aren’t so lucky.

How much longer do you think Venezuela can keep itself from imploding? Not much longer, if you ask a mango. And once that domino falls, so do the nearly 1.9 million barrels per day that PDVSA is even now struggling to maintain (spoiler: they won’t for much longer).

I’ll even push aside the fact that Libya, Nigeria, and Iran haven’t been underwhelming when it comes to raising output. One has to wonder how many governments are still claiming authority in Tripoli. The number is more than three.

It’s the U.S. that’s going to cause prices to flatline in 2018, according to the EIA. According to them, U.S. output is projected to average 10.3 million barrels per day this year, then rise to 10.8 million barrels per day in 2019.

Is the EIA being a bit too optimistic?

An Unlikely Winner

Chris knew the same figures I did. He’s read the same reports, looked at the same charts, too.

The guy is a technical genius, and trust me, his readers love him for it.

But there’s more to his bullish projection than candlesticks.

Last year, the IEA warned everyone about one catalyst that would send crude prices soaring.

It’s that global oil discoveries dropped to a record low in 2016. Yet, it’s more than just one down year. Remember, oil companies have drastically slashed their spending over the last two years.

Let me put a little perspective on this…

Over the last 15 years, companies averaged about 9 billion barrels per year in oil discoveries. In 2016, it was just 2.4 billion.

In fact, the IEA reported that the number of oil projects to actually receive a final investment decision dropped to its lowest since the 1940s.

image2-1-11-18

That’s going to have an effect on global production, and it won’t be pretty.

So when Chris showed me a long-forgotten oil field that’s just now being tapped for the first time, I couldn’t help but get excited.

Thing is, it’s in an area I never thought possible.

Here’s what he showed me.

Until next time,

Keith Kohl Signature

Keith Kohl

 

Energy and Capital



78 Comments on "Buy Oil, Make Money"

  1. Boat on Sun, 14th Jan 2018 12:49 pm 

    MM,

    Oil will always be available for those with money to buy it. If oil tripled in price you might spend a few thousand extra on fuel. Chump change. If your poor? Get a better job.

  2. GregT on Sun, 14th Jan 2018 12:50 pm 

    ““oil is used in the production of 95% of all industrial goods, so a shortage of oil would collapse the world economy & world governments””

    Nowhere in the report does it say that.

    You are completely full of shit MM.

  3. GregT on Sun, 14th Jan 2018 12:58 pm 

    “If oil tripled in price you might spend a few thousand extra on fuel.”

    If oil tripled in price, the economy would eventually collapse, and your money would become worthless.

  4. rockman on Sun, 14th Jan 2018 1:00 pm 

    Juan – “There were 8 immigrants to the USA present.” So then the obvious question: now that they discovered the true nature of the US where were the 8 of them planning to immigrate next? And for those that weren’t planning to: should we consider that despite our problems (which I agree we have our share) they still consider the US to be their best option?

  5. GregT on Sun, 14th Jan 2018 1:11 pm 

    “There are no expiration dates for science studies…Sorry you dont make the rules. You are just arguing because you are not man enough to handle the conclusions!”

    From your linked report MM.

    “The Bundeswehr Transformation Centre analyses changes that occur within and outside the Bundeswehr and provides incentives for concept development, armed forces planning and the Bundeswehr’s capability profile. It thus assists the Federal Ministry of Defence in centrally managing the transformation process.

    In this context, the purpose of security-related future analysis is to acquire knowledge precociously and scientifically based in order to refine conceptual specifications and objectives without making predictions. Being open-ended and not bound by directives, it provides ideas and approaches for aligning the Bundeswehr to face future tasks and therefore is a central part in the process of formulating objectives. Purpose of the study results is to enable the Federal Ministry of Defence to identify long-term issues with relevance to security policy at an early stage before forwarding them, if necessary, to internal or external organisations for a more detailed analysis.”

    You are completely full of shit.

  6. JuanP on Sun, 14th Jan 2018 1:18 pm 

    Boat, you probably still believe you are free. Am I wrong? I am 47, comfortably retired, and I don’t need to work for a living. The truth is I never had to work for a living but I chose to for 30 years. I spend my time doing things I consider useful like teaching children how to grow food organically. Yesterday I helped build a community garden at Gwen Cherry Park. I also helped to design it last year. I wonder if you’ve ever done anything useful. You sound like a completely useless person, but don’t feel bad, most people are just like you. You should fit in quite well in your country. LOL!

  7. MASTERMIND on Sun, 14th Jan 2018 1:20 pm 

    Greg

    You are such a pussy I swear! LOL

    Page 58

    In the medium term, the global economic system and all market-oriented
    economies would collapse.

    And what do you think will happen after the world economy collapses? Anarchy! Just like I said you fucking pussy!

  8. MASTERMIND on Sun, 14th Jan 2018 1:24 pm 

    Greg

    What happened to bring it on! Tough guy! Look who is a bitch now! And when the goons come to your home! They are going to rape your wife all day and night! And if that bitch doesn’t swallow, they will put it on a spoon for her! lOL

  9. JuanP on Sun, 14th Jan 2018 1:25 pm 

    Very valid question, Rock. I am here for my wife. The others are here mostly for loved ones or lack of economic opportunities to leave. I asked them the same question. The answers were “My daughter is here”, “My grandkids are here”, “I have to work for a living”, “I can’t afford to go elsewhere”, “I am too old to start again somewhere else”. I am glad you are still around here at PO.

  10. MASTERMIND on Sun, 14th Jan 2018 1:34 pm 

    Rockbrain

    Shouldn’t you be posting links from the Daily Caller? How about breitbart or daily mail? Anything is possible for those who are to dumb to question! LOL

  11. Boat on Sun, 14th Jan 2018 1:35 pm 

    JuanP,

    The last thing I am going to do is qualify my worth to a foreigner. Freedom? Where are you prevented from traveling to. Who forces you to eat what. What is it you cannot buy if you have money.What is it exactly that shows your not free. Me thinks your full of shut. Like mak, lol.

  12. MASTERMIND on Sun, 14th Jan 2018 1:44 pm 

    Boat

    You are just scared a mexican will work harder than you! Sorry pal not everyone gets a trophy in life! You have to earn it!

  13. rockman on Sun, 14th Jan 2018 1:51 pm 

    And now back to the subject of thread. I won’t spend the time researching it but I’m pretty sure the guy hyping the micro-cap company is their “market maker”. Such tiny companies are ignored by the big brokerage houses: much too risky and volatile. So a very small player will push the stock to his cliental.

    In the 90’s the Rockman worked for a micro-cap that had a market maker. The MM could effective control the trading price by its recommendations to the clients. Completely legal: the MM had the right to express its OPINION: buy at the market , hold or sell.

    The Rockman was lucky enough to have a small stock option (along with a few employees) that had to be exercised by 31 Dec. By Nov the stock price began to fall: the MM was recommending to the clients to bid lower purchase prices. Again all legal. So we sold our stock options cheap. Which were bought by the MM. And surprise: the bid prices increased in Jan: the MM became more optimistic about our future value. Did the MM hide its actions? Hell no: came to Houston from NYC and we had to buy the SOB’s lunch. Not only that they often controlled what we could or couldn’t drill.

    How did they get this power? If they dropped our stock no one in the market place would know we existed and our stock would be worthless because there would be no buyers. And again all legal by SEC regs.

    How did it eventually work out? Stock price increased more then 5X despite the company gaining very little value. We looked so good a Wall Street raiders successfully hit us with a hostile takeover and most of us, including the Rockman, lost our jobs. The good news: in a couple of years the raider lost his ass on the stock. He did bring the Rockman in on a consulting basis for a while in the hopes that I knew where the hidden value was. I did but his people ignored me and others. Shortly thereafter the company was liquidated thru bankruptcy for a few pennies on the dollar.

    Just a story to offer some insight on how SOME micro-cap oil pubcos might play out. And remember: the Rockman’s micro-cap was a financial success. I skipped some of the details on how my managers and the raider ruined our value. IOW the company he’s pushing might find a lot of profitable oil. But that doesn’t mean its stock might not end up worth much less then it was purchased for.

    And possibly nothing illegal was done in the process.

  14. Boat on Sun, 14th Jan 2018 1:59 pm 

    MM,

    I hire Mexican labor frequently. Roofs, digging, concrete, flooring etc. They do a great job on the yard. They don’t scare me. Lol In fact my jobs come with higher pay, paid meal and a ride if needed. I work in the real world, you should try it.

  15. MASTERMIND on Sun, 14th Jan 2018 2:05 pm 

    Boat

    You dont buy shit you are a worthless idiot who most likely lives with his sister/wife in a trailer down south.

  16. MASTERMIND on Sun, 14th Jan 2018 2:08 pm 

    Dear Reader,

    Here are five peer reviewed scientific studies authored by top experts that prove beyond any reasonable doubt that global civilization will collapse within the next decade.

    http://www.sciencedirect.com/science/article/pii/S0921800914000615
    http://www.energybulletin.net/sites/default/files/Peak%20Oil_Study%20EN.pdf
    http://rspb.royalsocietypublishing.org/content/280/1754/20122845
    http://sustainable.unimelb.edu.au/sites/default/files/docs/MSSI-ResearchPaper-4_Turner_2014.pdf
    http://www.feasta.org/2012/06/17/trade-off-financial-system-supply-chain-cross-contagion-a-study-in-global-systemic-collapse/

    Existing oil reserves are scheduled to begin a catastrophic crash within 1 to 3 years. When it hits the economic and social damage will be catastrophic. The end of Western Civilization, from China to Europe, to the US, will not occur when oil runs out. The economic and social chaos will occur when supplies are merely reduced sufficiently….

    https://www.scientificamerican.com/article/has-peak-oil-already-happened/
    http://www.sciencedirect.com/science/article/pii/S030142151300342X
    http://www.sciencedirect.com/science/article/pii/S0016236114010254
    http://www.geo.cornell.edu/eas/energy/the_challenges/peak_oil.html
    http://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017
    https://imgur.com/a/6dEDt

  17. MASTERMIND on Sun, 14th Jan 2018 2:08 pm 

    Existing oil reserves are scheduled to begin a catastrophic crash within 1 to 3 years. When it hits the economic and social damage will be catastrophic. The end of Western Civilization, from China to Europe, to the US, will not occur when oil runs out. The economic and social chaos will occur when supplies are merely reduced sufficiently….

    https://www.scientificamerican.com/article/has-peak-oil-already-happened/
    http://www.sciencedirect.com/science/article/pii/S030142151300342X
    http://www.sciencedirect.com/science/article/pii/S0016236114010254
    http://www.geo.cornell.edu/eas/energy/the_challenges/peak_oil.html
    http://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017
    https://imgur.com/a/6dEDt

  18. MASTERMIND on Sun, 14th Jan 2018 2:12 pm 

    Where did Greg the paranoid prepper go? Ill bet he is shaving his wife’s hairy mustache and bush! He wants to crunch and munch tonight! LOL

  19. rockman on Sun, 14th Jan 2018 2:26 pm 

    Juan – Thanks. I suspected as much. A dark skinned immigrant with a poor education lives in a different USA then my white ass. LOL. But look at my 17 yo daughter I adopted in China and think about her future here compared to what her life in China might have been. Assuming she had survived the orphanage and had a life in China.

    Somewhat like my history: had no useful skills in the civilian world but could go to La. uni for $48 my first semester. Even with that made a dumb choice: majored in Earth Sciences. Essentially geology. And no jobs when graduated so went for a MS. And then hit the booming job market in 1975. Pure dumb luck.

    Went back to New Orleans for 40th high school reunion. Mostly out of morbid curiosity. Between those that couldn’t afford the $40 ticket, in prison, dead of OD’s or didn’t make it back from Viet Nam not a very big crowd. But those that did show up unnerved my wife a tad. LOL. grow up in a very good neighborhood. In fact I was in last graduating class. We had such a bad reputation the Catholic church tore the school down and never rebuilt. Still an empty lot in a bad part of the French Quarter.

  20. rockman on Sun, 14th Jan 2018 2:33 pm 

    Actually grew up in a very bad neighborhood. (Not sure how autocorrect did that.) Still have knife scar in back. And that was done by a girl. Really. LOL.

  21. rockman on Sun, 14th Jan 2018 3:02 pm 

    Should said “very bad neighborhood”.

  22. JuanP on Sun, 14th Jan 2018 6:16 pm 

    Rock, I had more opportunities than most, too, and I know it. And I agree that your daughter is most likely better off here than she would have been in China, and she has you to thank for that. I, for example, will postpone going back to Uruguay for as long as possible. The reasons I left are still there. And life down there is dull, monotonous, and boring. I am happy I left, I am just very pissed at what the world is becoming, but I think it was inevitable. Basically, the whole world is getting worse not just the USA.

  23. GregT on Sun, 14th Jan 2018 7:05 pm 

    “Basically, the whole world is getting worse not just the USA.”

    Completely agree Juan, as per usual.

  24. MASTERMIND on Sun, 14th Jan 2018 7:29 pm 

    Juan

    OCED Economic Growth GDP Per Capita 1970-2015 (0.5%)
    https://imgur.com/a/HXBkr#Bv4I4AF

    Global Economic Growth GDP Per Capita (1.3%)
    https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG

    World Governments Gross Debt to GDP (330%)
    https://imgur.com/a/3usX7

    Global economic growth has peaked, says World Bank
    https://www.ft.com/content/4b9e6190-f55e-11e7-88f7-5465a6ce1a00

    Without growth the global economy will collapse..

  25. MASTERMIND on Sun, 14th Jan 2018 7:30 pm 

    Greg

    Did you get done shaving that bush of your old lady? She is a hairy fella! LOL It doesn’t matter how much you prepare, what matters is how much 99.99 didn’t prepare! LOL

  26. JuanP on Sun, 14th Jan 2018 9:33 pm 

    MM, My guess is you are just now discovering these problems most of us have understood and researched for years or decades and you are a little freaked out. It is very easy to understand. All of us have been where you are. If I were you I would try to do something about taking control of your life; it works for me. Every time I get freaked out I focus on my prepping and calm down. By the way, it is OECD, not OCED. Maybe if you learn its meaning you will remember the acronym; OECD stands for Organization for Economic Cooperation and Development. If you remember the meaning you will be able to figure out the acronym.

  27. rockman on Mon, 15th Jan 2018 3:54 pm 

    Juan – Hard to read between your lines but do you still miss Uruguay to some degree? I left New Orleans for Houston almost 40 years for career reasons. And those proved very correct. But still miss NOLA…increasingly more every time I watch NCIS New Orleans. LOL. I

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