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The Only 2 Investments I’m Buying Before Oil’s Summer Breakout

Written by Keith Kohl
Posted April 27, 2022

Oil prices are anything but stable, no matter which pundit is telling you otherwise. 

We’re barreling into a summer breakout for oil prices, and at this point all most people can do is sit back and watch it unfold. 

Most people.

Unlike the rest of the herd, the veteran members of our investment community here at Energy and Capital have had much better luck trading oil’s journey higher throughout the COVID pandemic. 

Last week, we talked about the incredibly bullish case for higher oil prices this summer. You see, the geopolitical chaos taking place right now isn’t the reason why crude oil prices are back above triple digits. 

Sure, we’re going to see fluctuations that will ride the war news out of Ukraine and short-term volatility from things like China locking down again from COVID, which ultimately puts downward pressure on global demand. 

However, underlying this geopolitical premium is a tightening supply/demand picture shaping up for this summer. 

The summer driving season will soon be upon us — the first one that won’t be harshly impacted by COVID. 

But we already know oil is surging higher soon.

The question is will you be in the right position when it does?

The Only Two Oil Investments I’m Buying Before Summer

There are only two oil plays I would buy heading into this summer breakout... 

And both are incredibly vital to the United States’ oil supply

You see, we know exactly where our future crude supply is going to come from. 

It's not a surprise that we’re relying more on our tight oil supply than ever before. 

Of course, one of the reasons we know this is because of how our drillers are operating. Last year, 81% of all oil and gas wells completed were either horizontally or directionally drilled. As you know, one of the hallmarks of tight oil drilling is turning the bit horizontal.

Take a look for yourself:

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In other words, the flood of new oil supply we’ve enjoyed for more than a decade at this point has been from just one of a few tight oil plays.

What’s also become acutely clear is that U.S. drillers are getting really good at their jobs. New-well oil production per rig in the Permian Basin has been steadily rising since 2012. 

Granted, it helps when you’re drilling longer wells each time. Since 2010, the average foot drilled per oil and gas well (both horizontal and vertical wells) more than doubled! Also keep in mind that they’re pumping out this oil with fewer rigs in the field.

Back in 2014, there were nearly 2,000 active oil and gas rigs whipped into a drilling frenzy while crude oil was trading above $100 per barrel. Today, there are fewer than 700 rigs in the U.S.

Expect that number to surge this summer. 

And in the U.S., there’s only one place to look for true oil profits. According to Baker Hughes’ most recent rig count, the Permian Basin has experienced its largest gain since January 2021.

Right now, there are 332 rigs in West Texas. But to give you a little perspective, that’s nearly half of all drilling rigs operating in the United States at the moment. 

Stay tuned, because I’ll break down my Permian Basin playbook soon. 

My second must-own investment this summer may surprise some of our newer readers.

I would bet the house that Canadian oil stocks are going to be some of the biggest winners of the summer. 

You see, not only does Canada export 4 million barrels of crude oil to us on a daily basis, but it takes a high commodity price environment for Canadian oil drillers to prosper. The bitter truth for Canada’s oil supply is that it comes at a price. 

It’s no wonder that shares of companies like Cenovus Energy have gained 937% since oil prices hit negative in 2020!

I don’t see their momentum slowing either. 

Until next time,

Keith Kohl Signature

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.

Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.

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