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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. onlooker on Sat, 13th Jan 2018 2:30 pm 

    When are the so call experts going to understand that supply/demand dynamics will no longer work in the case of Oil and the Economy. Energy is the fundamental driver of economic activity hence demand. Both Producers and Consumers are hurting with a paucity of net energy. No Goldilocks price exists anymore. So the Oil Industry and Economy are dragging each other down and with that the oil price

  2. Pat on Sat, 13th Jan 2018 6:51 pm 

    the world demand for oil is rising at an unprecedented rate with supplies remaining stagnant and things of shale potential to rein prices, flood oil just junk, ridiculous. prepare…

  3. JuanP on Sat, 13th Jan 2018 7:34 pm 

    Jim Kunstler “… how much of a “shithole” is our own country these days?” That is the same thing I thought when I first heard Trump’s comment. Pot, kettle, and all that. In today’s world any residents or citizens of the USA calling another country a “Third World shithole” need only wake up and look around them to know what does looks like. I always find it funny when Americans accuse others of being and doing inferior in some way. No country in human history ever achieved less with more than the USA in its history. They have been raping, killing, and robbing the world for more than 200 years and what do they have to show for it? Nothing good! What a fucking waste!

  4. JuanP on Sat, 13th Jan 2018 7:35 pm 

    Kunstler
    http://kunstler.com/clusterfuck-nation/who-moved-my-xanax/

  5. Mad Kat on Sat, 13th Jan 2018 7:58 pm 

    Juan, You got it in one! I keep pointing out the 3rd world America and most here only want to point to some other place as being 3rd world, not the ‘land of the free’. I guess when you live in the sewer, the stink is not noticeable after a while. It smells like roses. lol

  6. MASTERMIND on Sat, 13th Jan 2018 8:25 pm 

    Madkat

    What about those Solar powered highway in China? People stole the panels and the road started to crack in five days. It was supposed to last 20 years! They wasted millions on it! LOL SO Dumb the Chinese are! Thats why they were so late to the oil party! Now their time is coming to an end!

  7. MASTERMIND on Sat, 13th Jan 2018 8:26 pm 

    That map of oil discoveries says it all!

  8. Mad Kat on Sat, 13th Jan 2018 10:14 pm 

    Well MM, do you know the story of the US highways today? Some are being allowed ot return to gravel because there is no money to repair them. How many years did it take ot perfect the airplane? How many crashes before they were considered safe? All new inventions have problems in the beginning. All of them.

    https://www.nytimes.com/2017/03/07/us/omahas-answer-to-costly-potholes-go-back-to-gravel-roads.html

    BTW: Bronze manhole covers are being stolen in the ‘prosperous’ US these days. Also copper wire. What are you trying to prove?

    https://www.mswmag.com/online_exclusives/2015/02/5_ways_cities_are_clamping_down_on_manhole_cover_theft

    “Copper theft ‘like an epidemic’ sweeping US” = https://www.cnbc.com/id/100917758

    The US is 3rd world.

  9. MASTERMIND on Sat, 13th Jan 2018 10:26 pm 

    Madkat

    and kids are swimming in garbage in your shit hole country!

  10. Mad Kat on Sat, 13th Jan 2018 10:48 pm 

    And in yours, pm;y the stuff you can see is just wood and plastic. Not dangerous. It is the things you cannot see that are deadly. Mercury, drug residue, industrial chemicals, etc.

    “More than 12.7 million pounds of toxic chemicals such as nitrates, arsenic, benzene and mercury were dumped into the Mississippi River in 2010, according to a report released today by the advocacy group Environment Missouri.”

    http://www.stltoday.com/lifestyles/health-med-fit/health/mississippi-river-is-second-most-polluted-u-s-waterway/article_bce8579e-7449-11e1-9b27-001a4bcf6878.html

    “It shows the Ohio topped the nation’s waterways for pollution discharges from industry at 24,180,821 pounds in 2013, the most current year available.”

    https://www.usatoday.com/story/news/nation/2015/03/14/ohio-river-tops-list-industrial-pollution/24784863/

    “The U.S. Steel plant in Portage, Indiana, released nearly 300 pounds of hexavalent chromium in April because of a pipe failure.

    And on Oct. 25, it released 56.7 pounds of chromium after a wastewater treatment system malfunction, nearly double the 30 pounds of the potentially cancer-causing chemical over 24 hours that the plant is permitted to release.”

    https://chicago.suntimes.com/news/u-s-steel-lake-michigan-pollution-hexavalent-chromium/

    Many more facts to list…

    Now, you were saying about swimming in pollution? Obviously 3rd world America is no better than, and maybe worse than, the Ps. We have little industry here to pollute the rivers. As for the floating junk, that comes from all over but is mostly harmless. The pictures you see in the news are cherry picked to represent the author’s point, not the general situation.

  11. Mad Kat on Sat, 13th Jan 2018 10:48 pm 

    …most of…

  12. GregT on Sat, 13th Jan 2018 11:04 pm 

    “Madcat and kids are swimming in garbage in your shit hole country!”

    Mad Kat’s country is the US of A MM. He’s been an American for over twice as long as you’ve been alive. but don’t let that stop you from continuing to act like a complete moron.

  13. Mad Kat on Sat, 13th Jan 2018 11:13 pm 

    Greg, Both he and Davy have short attention spans. Neither seem to be able to read and comprehend what the words are saying. I would accuse them of being bots but computers are not that stupid.

  14. MASTERMIND on Sat, 13th Jan 2018 11:27 pm 

    Greg

    Get off Madkats cock! Geez! You just stick up for him because he bugged out like you away from society like a paranoid loon! Hey Greg how are you going to feed that big ole lady of yours when the store shelves dont have food? She will be hungry big fella! LOL

  15. GregT on Sun, 14th Jan 2018 12:09 am 

    MM,

    Grow up, or put that bullet in your head now, and stop wasting everybody else’s time.

  16. MASTERMIND on Sun, 14th Jan 2018 12:16 am 

    GregT

    Triggered? Dont take it out on your sister/wife! i know how you religious people treat your ladies!

  17. GregT on Sun, 14th Jan 2018 12:32 am 

    MM,

    Grow up, or put that bullet in your head now, and stop wasting everybody else’s time.

  18. MASTERMIND on Sun, 14th Jan 2018 12:36 am 

    Greg

    do you shave your old ladies bush? Or do you just let it grow wild like a chia pet? She must be a really dumb and ugly woman to move out away from society with an obvious paranoid delusional person like you! LOL

  19. Mad Kat on Sun, 14th Jan 2018 12:46 am 

    Teenage MM is on line again. Must be boring in mom’s basement. lol

  20. GregT on Sun, 14th Jan 2018 1:00 am 

    “She must be a really dumb and ugly woman to move out away from society with an obvious paranoid delusional person like you!”

    My wife has a PHD MM, and still makes six figures. Not that it really matters, between the two of us, we likely made more this year, than you will make for the rest of your entire life.

  21. MASTERMIND on Sun, 14th Jan 2018 1:09 am 

    Greg

    sure she does greg I believe you! She doesn’t do shit besides sit on her fat ass watching Tv all day and growing her huge hairy bush for you to crunch and munch! You sick Canadian bastard!

  22. MASTERMIND on Sun, 14th Jan 2018 1:11 am 

    Greg

    No woman with a Phd moves away from society with a misanthrope like you!

  23. MASTERMIND on Sun, 14th Jan 2018 1:14 am 

    My girl doesn’t even wear panties most days. And she shaves everything! your girl Greg wears granny panties I bet..Fruit of looms! LOL And Madkat hasn’t had the scent of a woman in so long he most likely wouldn’t know what to do with one if he got it!

  24. GregT on Sun, 14th Jan 2018 1:29 am 

    MM,

    You have serious psychological problems buddy. Seek professional help.

  25. MASTERMIND on Sun, 14th Jan 2018 1:37 am 

    Greg

    I need help? Says the guy who bugged out and moved into the woods like the Unabomber! and believes in Jesus! LOL

    And why do you keep barking orders at me? I am not your dipshit wife!

  26. GregT on Sun, 14th Jan 2018 1:44 am 

    MM,

    Yes, you are in dire need of psychological intervention.

    “And why do you keep barking orders at me?”

    I couldn’t care less about what you amount to in your life. You’re on your own son.

  27. Mad Kat on Sun, 14th Jan 2018 2:27 am 

    Mm, did you say your GF is a slut and doesn’t wear panties? WOW! Gutter trash!

  28. MD on Sun, 14th Jan 2018 3:28 am 

    It’s always a crap shoot, but in twenty years now of watching this market, it might be time to buy into some futures. That’s assuming the world economy doesn’t blow up. Take your bets!

  29. Davy on Sun, 14th Jan 2018 5:29 am 

    “Grow up, or put that bullet in your head now, and stop wasting everybody else’s time.”

    HYPOCRITE, stop your childish attacks on Americans. What do you dumb Canadians say…”already”..yea.

  30. Davy on Sun, 14th Jan 2018 5:34 am 

    “My wife has a PHD MM, and still makes six figures. Not that it really matters, between the two of us, we likely made more this year, than you will make for the rest of your entire life.”

    Hypocrite, you are one of those braggart 1%er that constantly whines about the poor of the world but sure loves to talk down American poor. DISGUSTING

  31. Davy on Sun, 14th Jan 2018 5:35 am 

    “Yes, you are in dire need of psychological intervention.”

    Exactly and it is documented on the board you have a therapist. Did you go off the meds and quit seeing her?

  32. Davy on Sun, 14th Jan 2018 5:37 am 

    “Mm, did you say your GF is a slut and doesn’t wear panties? WOW! Gutter trash!”

    Does you Fillipino boyfriend wear undies?

  33. GregT on Sun, 14th Jan 2018 11:02 am 

    “HYPOCRITE, stop your childish attacks on Americans.”

    I could care less what tax farm you guys were born into.

  34. Davy on Sun, 14th Jan 2018 11:07 am 

    Me too so mind your own business

  35. GregT on Sun, 14th Jan 2018 11:10 am 

    “Hypocrite, you are one of those braggart 1%er that constantly whines about the poor of the world but sure loves to talk down American poor.”

    I could care less what tax farm you guys were born into, and personal attacks against my wife are somewhat off topic. I have very good reasons to be proud of her. She is highly intelligent and has a very strong work ethic.

  36. Davy on Sun, 14th Jan 2018 11:12 am 

    Me too so mind your own business.

  37. GregT on Sun, 14th Jan 2018 11:13 am 

    “Me too so mind your own business”

    It is you alone, who has polarized this board along an American vs the rest of the world line.

  38. GregT on Sun, 14th Jan 2018 11:21 am 

    “Me too so mind your own business”

    When someone carries out personal attacks against my wife, that is my business. Not yours.

    Mind your own business.

  39. Davy on Sun, 14th Jan 2018 11:26 am 

    Shut up grehg and say something. Your whining gets old. Nobody cares about your sob story except your boyfriend, Mad Kat. Talk your Nazi stuff with nedernazi. Just stay out of my business prick.

  40. MASTERMIND on Sun, 14th Jan 2018 11:28 am 

    GregT

    You sound like a really paranoid dude! Tax farm? Like we are all being enslaved against our wills? You sound like that other Canadian nutter Stefyen M…

    Not everyone fights paying taxes like you Greg…Not everyone is a misanthrope like you either!

  41. Davy on Sun, 14th Jan 2018 11:34 am 

    mm, he is a hyper anti-American west coast Canadian who’s intellectual life is built on a foundation of American hate. Here on this board he specializes in stalking and pricking Americans. He is infatuated with himself and constantly bragging. Disgusting

  42. GregT on Sun, 14th Jan 2018 11:36 am 

    “Not everyone fights paying taxes like you Greg”

    Fighting paying taxes can land a person in a jail cell MM, and I likely paid more in taxes last year than what you made in wages.

  43. GregT on Sun, 14th Jan 2018 11:40 am 

    “he is a hyper anti-American west coast Canadian who’s intellectual life is built on a foundation of American hate.”

    I have plenty of friends, and family, who are Americans. Most of them are exceptional people, unlike you and MM. You guys are an embarrassment to decent Americans everywhere.

  44. MASTERMIND on Sun, 14th Jan 2018 11:50 am 

    or those who haven’t seen it, German military report on peak oil: 3 years left until anarchy

    http://www.energybulletin.net/sites/default/files/Peak%20Oil_Study%20EN.pdf

  45. JuanP on Sun, 14th Jan 2018 12:00 pm 

    Today I was getting my coffee and I started a conversation with everyone at the coffee place. There were 8 immigrants to the USA present. All ages, sexes, and orientations. We all agreed that in the USA there is no freedom and we all agreed that this is a repressive police state. We also all agreed that this is the most ignorant, divided, polarized, materialistic, and selfish society we had ever known. Not one disagreed! It is becoming self evident that the USA is a corrupt, immoral, criminal, and abusive country. The way things are going I think that the rest of the world will soon agree on something for the first time in human existence: the USA sucks and most Americans are completely full of shit. We have some perfect examples of this here at PO.

  46. GregT on Sun, 14th Jan 2018 12:05 pm 

    “or those who haven’t seen it, German military report on peak oil: 3 years left until anarchy”

    That report is 8 years old, mentions nothing about anarchy, and was discussed here on PO.com a very long time ago.

  47. MASTERMIND on Sun, 14th Jan 2018 12:41 pm 

    Greg

    From the report
    “oil is used in the production of 95% of all industrial goods, so a shortage of oil would collapse the world economy & world governments”
    http://www.energybulletin.net/sites/default/files/Peak%20Oil_Study%20EN.pdf

    Whats the matter Greg I thought you said bring it on? Now you are backing out like a bitch! Pussy!

  48. Boat on Sun, 14th Jan 2018 12:44 pm 

    JuanP,

    You and those immigrants have the freedom to leave the US. You also have the freedom to buy about anything one needs to survive. All you need is a job.

  49. MASTERMIND on Sun, 14th Jan 2018 12:46 pm 

    Greg Hubberts original study in 1956 was produced 14 years before its conclusions came true. 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!

  50. MASTERMIND on Sun, 14th Jan 2018 12:48 pm 

    boat

    Why immigrants or no immigrants the US economy is still in a never ending depression. Keeping immigrants or getting rid of them is not going to solve your finical issues. Its the economy stupid!

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