Weekend: Holiday Jams and OPEC Threats

Keith Kohl

Written By Keith Kohl

Posted July 2, 2011

Welcome to the Energy and Capital Weekend Edition — our insights from the week in investing and links to our most-read Energy and Capital and sister publication articles.

There’s one holiday that I never look forward to, and for only one reason…

Each year, I make the inevitable sojourn from the streets of Baltimore to Pennsylvania.

And every year, the tiny corridor we know as Interstate 95 becomes the source of persistent frustration.

What is typically a two-hour trip degrades into a five-hour, bumper-to-bumper jam up to 65 miles long. It’s not from some accident that needs to be cleared… There are simply too many cars with the same direction in mind.

Last year, I thought I’d outsmarted the rest. I started my journey long before the sun broke the horizon. To my dismay, the idea backfired when too many other people had similar plans…

Still, we make these trips with a light at the end of the tunnel: friends and family, and perhaps a few fireworks in between.


Gasoline Prices Heading Lower

So are things aiming to get better or worse from here on out?

The Energy Information Administration reported a 1.4 million barrel drop in total gasoline stocks — nearly five million barrels lower than a year ago — in its weekly petroleum data.

As you can also see below, gasoline demand is slightly more than 200,000 barrels less than the same time last year.

EIA gas demand

Prices at the pump are a different story.

Heading into the Fourth of July weekend, the average retail price for gasoline across the U.S. is approximately $3.57 per gallon. Last year, a gallon of gas averaged the American only $2.75 per gallon — 30% lower than this holiday weekend’s fill-up.

US Gas PRices

OPEC Threats and Cheaper Gas

Not all families will be spending the weekend in the backyard around a grill, enjoying each others’ company…

The rift in OPEC has been visible for years. The price hawks like Iran and Venezuela are constantly bickering with the Saudis over production quotas (not that either one of the sides adhere to the agreed upon output quotas).

And the IEA dropped a bombshell on OPEC members when it announced the release of 60 million barrels of oil from the strategic reserves of various countries (the United States alone is anteing up 50% of the total).

Their response was predictable.

This week, OPEC Secretary General Abdalla Salem El-Badri was quick to warn the IEA this maneuver shouldn’t become a habit.

Of course, it also raises the question of whether or not OPEC now has the opportunity to cut output during its next meeting…

If OPEC does lower production, they certainly won’t say it’s retaliation for the 60 million barrels of oil the IEA released into the market. The oil cartel already hinted at a production cut on Friday morning, saying Asian demand is decreasing.

Enjoy your holiday,

kpk signature

Keith Kohl
Editor, Energy and Capital

P.S. Don’t be too disheartened with OPEC’s desire for $100/bbl oil. Even though they’ll be pocketing more than a trillion dollars in oil revenues this year, that doesn’t mean you can’t take your own piece of the profits. Below, I’ve included some of the best investment stories to cross my desk this week…

The $267 Billion Oil Heist: Oil’s Next Frontier
Following his most recent trip across the globe, Energy and Capital Editor Christian DeHaemer sheds light on the $267 billion oil fortune sending OPEC into panic mode.

How Rich Investors Pocket the Easy Profits: Your Free Ticket to Trading Options
There’s one, very specific reason why the average investor doesn’t take advantage of options trading – they don’t know how! And those that do are quickly daunted by the seemingly complex procedure. That’s precisely why Ian Cooper takes on the task of teaching investors how simple it is to gain quick, easy profits — and it’s all in this how-to video.

Untapped Billions: How Play the African Oil Boom
Fresh off an expedition to Kenya, Editor Christian DeHaemer explains how East-African oil assets can earn early investors potential triple-digit gains.

Dawn of a New Age: The Future is NOW
Learn all about the radical change in medicine that will revolutionize the way we think about aging, disease, and longevity.

Oil’s Great Dance: The True End of Cheap Oil
Editor Chris DeHaemer advises readers to tap into the most predictable — and most unstoppable — financial trend in modern history and leverage it into earnings for themselves. Trust him when he says you’ll appreciate the extra cash when a loaf of Wonder bread starts costing $10 at your local Giant…

Easy Options:  Let “The Coach” Show you How Make the Big Bucks
This first-of-its-kind tutorial explains why rich investors don’t trade stocks anymore — they make bundles trading options instead. Options Trading Coach Ian Cooper tells you all you need to know to join them.

Make Wall Street’s Next Failure Pay for Your Summer Vacation: The Cheerleaders have Pumped This Sector Full of Happy Gas
The Wall Street/Washington Axis has set up yet another sector for failure. Here’s how to leverage the inevitable crash.

Why Are Gold Stocks Underperforming Gold?: Shocking Data Reveals 57% Spike in Gold Mining Costs
The price of gold has rallied over in the past twelve months. But despite a solid increase, gold stocks have had difficulty keeping up… Analyst Luke Burgess explains why gold equities are underperforming physical bullion in the market

Japan Goes Solar: A $286 Billion Play on Japan’s Nuclear Fallout
Editor Jeff Siegel discusses how a new energy plan in Japan could spark a $286 billion play on solar.

Big Oil’s Big Test: Oil’s Next Move is NOT about Low Reservoirs in Texas or Storms in the Gulf…
Technical analysis of Big Oil reveals a fast move approaching. Adam Lass tells you how to leverage it.

Peak Oil Investments: When Will the Giant Oil Fields Fall?
Why the world relies too much on the output of giant oil fields… and where investors will turn when these massive fields fail us.

Global Water Crises & Solutions: A Liquid Investment Overview
Investors should focus on water-related companies that own high-end technologies: firms that treat water generated when fossil fuels are extracted and those that remove salt from sea water. Those changes will help fuel growth of 4%-6% over the next year for the $450 billion industry, despite the economy’s sluggishness…

Buy The Dip In Gold Miners: Chaos, Anarchy, Profits
Analyst Greg McCoach warns investors of continued market volatility and explains how to profit during these uncertain times.

The Housing Double-Dip Can’t Be Stopped: How to Play the Final Act
Editor Steve Christ takes a look back at five years of writing about housing to explain why a double dip in the market is inevitable.

2015: End of the Oil Age: Consensus Grows for Looming Peak
Several events in the past few months have proven the most powerful governments in the world have known about Peak Oil for years. They’ve been intentionally downplaying it… and they have no idea what to do about it.

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