Invest in Canadian Oil As Mexican Output Tumbles
Jul 8th, 2008 | By Brian Hunt | Category: Oil Investment & Alternative EnergyBrian Hunt finds contrasting fortunes at America’s borders. Oil production in Mexico is tumbling, setting off alarm bells over economic growth and government revenues. At the same time, Canada ramps up output of the black stuff at the world’s largest safe deposit. Brian says the world will need to invest billions in new oil exploration in the coming years. In the meantime, he sees Canadian oil as a safe investment bet.
Bleak headlines for America’s third largest supplier of foreign oil: Production at Mexico’s giant Cantarell field fell 34% from May 2007 to May 2008. This is a huge problem for Mexico. Cantarell is one of the three largest oil fields in the world. Mexico’s state-owned Pemex gets 37% of its production from it. The Mexican government gets 40% of its revenue from Pemex.
Cantarell’s massive decline also pulls together a number of themes we cover regularly in DailyWealth: 1) Never trust a government to operate so much as a hot dog stand. 2) There are no easy barrels left. 3) The world needs to spend billions and billions on new oil exploration, which will drive a bull market in oil services. And lastly, 4) Invest in Canadian oil production.
Canada is one of the ABCs of resource investment. It is home to the largest safe oil deposit… a deposit that is increasing production. The world’s largest gas-guzzler is Canada’s next-door neighbor. And most importantly, caribou aren’t interested in suicide bombing.
All of these attributes will produce a slew of stock charts like today’s. Suncor Energy (SU) is the poster child of the Canadian oil boom. As you can see, what’s bad for Cantarell is good for Canadian oil investments.
Source: HORRIBLE NEWS FOR MEXICO, GREAT NEWS FOR CANADA
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