How You Can Cash Out of This Oil Boom
Mornings are usually quiet around here.
You know the kind of peacefulness I’m talking about. In the wee hours of the morning, when hardly a soul is around and it’s just you and your thoughts.
Granted, I say usually because mine was interrupted nearly right away.
It was a gruff voice from across the room that cracked the silence: “Where’s oil going to be a year from today, $40 or $100?”
Now, my veteran readers know that I’ve gotten into a row or two with my colleague Christian DeHaemer in the past. Sometimes we just don’t see eye to eye on the same situation.
This time was different, however.
I knew he was on my side of the fence on this one.
In fact, you might even remember back in early May, when Chris gave you 10 reasons why the oil bull was back. (I’d argue that the bull actually started in 2016, but I wasn’t going to poke the bear this time.)
Whether or not WTI makes the ultimate run to $100 per barrel remains to be seen.
Is it possible? Absolutely.
There are too many factors that could give us triple-digit crude prices. That’s simply the nature of the oil markets, given the undeniable powder keg that is Middle East geopolitics. All it takes is one of those fuses to be lit, and we’ll be on our way.
But here’s the important part for individual investors like us who are looking to capitalize on higher oil prices...
Oil doesn’t need to hit $100 for you to find some great investments in the sector.
Capturing an Oil Crown
Look, I know it’s far more interesting to dream up the black swan events that would massively disrupt global oil markets today.
That kind of chaos and devastation would be extraordinary.
But again, it doesn’t need to happen for you to cash out at the end of this oil boom.
And it IS a boom, dear reader.
The United States’ tight oil drillers are responsible, particularly those in the Permian Basin in West Texas.
In the Permian alone, companies are extracting 3.2 million barrels of oil every day from underneath the Texas soil.
To put a little perspective on that, more oil is extracted from West Texas than the next three largest oil-producing regions: the Bakken, Eagle Ford, and Niobrara.
Of course, the fact that these Permian drillers are so close to the Gulf of Mexico will help push U.S. oil exports to new heights going forward.
It was just a month ago that the Nave Quasar, a VLCC capable of carrying 2 million barrels of oil, arrived at one port along the Gulf.
This was the first time a tanker of this size has reached a Gulf oil terminal... but it won’t be the last.
With everything seemingly going right for the U.S. oil industry, you have to wonder if there is anything that can put a damper on this boom.
And it’s on these opportunities that we need to be ahead of the investment herd.
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One Way to You Can Cash Out of This Oil Boom Now
Believe it or not, the strong production growth in the United States comes with its own complications. And during this period of high oil prices, there are a number of stocks that stand out from the crowd.
One of those winners will be oilfield service companies.
That should make some sense, right? After all, higher commodity prices mean they can charge their clients more for their services and products.
Take Halliburton (NYSE: HAL), for example. Halliburton is one of the largest oil service companies on the planet. The company’s year-over-year earnings in 2018 are projected to nearly double, and over the next two years, they’re expected to grow by 178%.
Now, Halliburton also happens to be a huge company, commanding a market cap of about $42 billion.
In other words, we aren’t the only ones who would get a piece of the action.
No, we can do better than that, can’t we?
You don’t want to simply join the herd; you want beat them to the punch.
Over the next few weeks, we’ll delve into some of these undiscovered investment gems that Wall Street has yet to catch wind of.
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.
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