Matt Badiali is the editor of the S&A Oil Report, a monthly investment advisory that focuses primarily on oil as an investment from small exploration outfits, to equipment companies, to the biggest oil companies in the world. He is also a contributor to the Daily Wealth.
How long before Bakken has a real impact on the price of oil? The answer’s never, sorry. Here’s why…
I don’t believe nuclear energy is the solution to this problem, at least not in its current form. The dirty secret of the nuclear industry is that we still don’t have an adequate waste disposal system. While carbon dioxide pollution may let New Yorkers grow palm trees, radioactive waste will kill you.
Today, I’d like you to imagine a hot-dog business. After buying your cart, permits, insurance, hot dogs, buns, and condiments, you hit the street. You sell hot dogs people will happily pay $2 for. Let’s say it costs you about $1.50 to produce a hot dog, so you’re making a gross profit of $0.50 per unit.
If the government demanded U.S. oil be sold at a massive discount to domestic markets, oil producers would stop investing in the U.S. And we’d end up buying all of our oil abroad.
Just imagine if gasoline cost $20 a gallon. You’d start by cutting your driving in half. Then you’d almost never go out to restaurants, because food would become so expensive. You’d probably pull the old bike out of the closet. America would scream bloody murder and lynch the CEO of ExxonMobil.
A recent story in the Financial Times covered the possibility that Nigeria’s crude oil output could fall by a third in the next seven years. The problem is, Nigeria is one of the top five foreign oil suppliers to the U.S.
The key to making money in oil stocks this year…Is to sell ‘em. That’s right. The editor of an oil-stock advisory is telling you to sell oil stocks. But before you decide I’m committing professional suicide, realize that selling is how you realize profits in any stock, aside from blue chips you plan on keeping forever.
Drillers found oil in my home state in 1943. The Sunniland trend in South Florida has produced about 110 million barrels so far. And the Big Cypress National Preserve produces about 730,000 barrels of oil per year.
Seymour Schulich probably saved Newmont Mining with a single stock trade. In October 2004, Schulich came to the simple realization that even though prices had already doubled over the preceding two years, oil’s cost had to rise much higher since demand continued to outstrip supply.