The Last Winning Oil Stock of 2022

Keith Kohl

Written By Keith Kohl

Updated May 15, 2024

Last week, it was hard for us NOT to take the EIA’s gasoline demand numbers seriously.

Am I alone in thinking it’s absurd to say that gasoline demand right now is comparable with that of July 2020, when the world was locked down tight as a drum (except you, Florida)? Those of you who did the unthinkable and ventured out of your house during the summer of 2020 and found that entire interstates had become ghost towns, does it feel like that right now? 

Suggesting that demand is lower today than it was back then goes against more than what our nation’s refiners are telling us — it defies all common sense. That’s not to mention that falling prices at the pump, which the White House is always quick to point out when cornered, should lead to MORE demand, not less. 

But hey, it’s the EIA, where reports are made to be revised. Why get it right now when you can just go back and shrug your shoulders as you input the correct numbers?

But while we eagerly wait for this mystery to be solved, everyone has been missing what could prove to be the last winning oil trades of 2022. 

And as I mentioned before, it’s all thanks to President Biden. 

You see, thanks to Biden’s historic releases from the Strategic Petroleum Reserve, one group of oil stocks took a harsher beating than the rest.  

Right now, they’re a screaming buy for us.

When President Biden started tapping into the SPR in an effort to combat high gasoline prices, he did something that made a lot of sense — and deserved more credit than he got for it. 

Although 1 million barrels per day is a drop in the bucket on a global scale, it’s not the amount of oil I want you to focus on.

I want you to look closer at what kind of oil we’re selling. 

As you know, the crude oil we extract from underground isn’t always the same. For example, the crude we drill up in the Permian Basin is of the light-sweet variety. 

However, what we’ve been selling to refiners has been medium-sour crude. It’s more viscous than light oil and also comes with a higher amount of sulfur. 

This medium-sour crude is also what our refiners prefer to buy most because they can more easily process it into gasoline. 

In fact, we’ve sold so much medium-sour crude from the SPR that it now holds more light-sweet crude inside it. Keep in mind that most of our refineries along the Gulf Coast of Mexico are geared toward medium and heavy grades of crude oil. 

This disparity between medium-sour and light-sweet has been big trouble for one group of oil stocks. 

Just ask yourself where we get most of our heavy oil from…

If Canada comes to mind, you’re right.


The Last Winning Oil Stock in 2022

If we’ve learned nothing else from 2022’s wild ride for oil prices, it’s that not all oil stocks are created equal. 

And like every investment you make in the market, the most important thing is timing. 

Timing can make or break your trade. 

After all, the name of the game isn’t to sell low and buy high, is it?

When we started releasing so much medium-sour crude from the SPR, it was only natural that Canadian oil companies would feel the pain more than most. 

But if there’s one takeaway I want you to leave with today, it’s that the SPR releases were merely a Band-Aid. 

In October, those SPR sales are expected to stop. 

Now, I want you to think about what will happen when those sales stop and demand isn’t at pandemic-level lows. 

If this demand destruction we’ve been told about isn’t taking place, the first oil stock that should hit your radar is Cenovus Energy (NYSE: CVE). 

Check it out for yourself, because once Uncle Joe’s SPR releases have dried up, these heavy oil producers in Canada will gain huge upside momentum heading into 2023. 

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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