How to Profit From the Great Oil Reset
All our troubles seemed so far away in December 1970.
Just a month before, U.S. oil production had averaged a new all-time record of 10.04 million barrels per day.
Life was good on top, and the future looked brighter every month.
For us, the sky was the limit.
So you can imagine why the dip back below 10 million barrels per day that December didn’t cause too much alarm.
Then it dipped again just one month later.
Within the next few years, our domestic crude output tanked below 8 million barrels per day.
Nothing could save production as it fell into an inexorable decline that cut U.S. oil production in half over the ensuing 38 years.
Decades of declining production took a harsh toll on our country.
We were clearly in trouble as our foreign oil imports jumped 657%, swelling to over 10 million barrels per day during that period.
Look, we all know what happened next.
Utilizing both hydraulic fracturing and horizontal drilling techniques, drillers were able to tap into an enormous wealth of crude tightly packed in the shale rock underground.
The rest was nothing short of a miracle for a long-beleaguered oil industry.
Companies drilled at a frenzied pace as Wall Street cash poured into the most prominent tight oil and gas plays in the United States
U.S. oil production once again topped 10 million barrels per day within a decade.
But there’s a pretty big catch in all of this hype.
You see, the oil that our society feeds off today isn’t the oil of our fathers.
The easy-to-extract crude that Big Oil enjoyed in the past has continued to dwindle, despite the raging oil boom that the public saw.
If nothing else, the shale boom draped a mask over the decline in conventional production.
During the first week of this month, output from U.S. fields averaged 10.7 million barrels per day.
Nearly two-thirds of this crude was extracted from our tight oil resources.
In fact, people have conveniently forgotten this fact.
Take California and Alaska as prime examples.
Prior to the shale boom, these two states were among the highest oil producers in the country — only Texas boasted higher output.
In May, California’s crude production fell below 400,000 barrels per day for the first time since the EIA started tracking its production in 1981.
Meanwhile, Alaska’s production averaged 404,000 barrels per day, a low it hasn’t seen since 1977!
However, Alaska’s peak oil crisis is unique. Remember, if the Last Frontier's oil production falls below a certain threshold for a prolonged period, there will be serious ramifications for the Trans-Alaska Pipeline System.
And yet the death of conventional oil inside the United States will open up a wide array of opportunities for individual investors like us.
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Post-COVID Oil Profits
If the shale boom was the savior of the U.S. oil industry, it certainly didn’t come without its drawbacks.
Not only are wells far more expensive than your typical conventional well, but keep in mind that these tight oil wells experience much harsher decline rates.
More rigs, more wells, more barrels… and a lot more cash.
So when something catastrophic happens — let’s say a crisis develops that shuts down the global economy and causes both oil prices and demand to hit rock bottom — the effects will hit our tight oil supply harder.
We can see this happening in North Dakota right now. Once the darling of the oil industry, North Dakota’s oil production has dropped far more sharply than the rest of the pack.
Virtually all of the state’s output stems from the tight oil formations in the Williston Basin. This year, North Dakota’s crude production has fallen nearly 42% — twice that of other conventional areas.
While low prices make it nearly impossible to turn a profit in the shale patch, the smart investors can see that the blood is already in the water, and the sharks are circling.
They’re hungry for fresh meat.
That’s why we’re seeing major oil players scooping up assets like wildfire. They simply can’t help themselves.
Everyone’s looking to take advantage of the great oil reset.
Yet one Texas geologist managed to strike billions of barrels of pure black gold.
As a premium member of our investment community, it’s only right that you have the first crack at securing the early profits from his massive discovery.
My publisher is forcing my hand to release this new investment report to the public later this week, so I strongly recommend you take a moment to check out the details for yourself first at no cost to you.
Until next time,
A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.
Energy Demand will Increase 58% Over the Next 25 Years
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