Tuesday, February 10, 2009

Oil Investment | 2009 and Beyond

The oil and gas industry continues to struggle as overall demand continues to decline. That has of course, as far as oil demand goes, created the current contango or super contango situation which has resulted in a great chance to make safe money through oil investment.

Even though oil and gas companies will have some short term difficulty and challenges, as the economic circumstances continue to gradually improve, people will start driving, flying and traveling again, and we'll see oil demand and oil prices start to increase again.

Oil news has been somewhat grim, but again, crude oil isn't going to drop in need or use anytime soon, and even though mainstream media outlets love to make big oil companies look like villains, they will continue to be profitable far into the future because of the demand for it will not stop any time soon.

Many people that in reality oppose the use of oil for a variety of stupid reasons, like to try to make the argument that we've reached the point where oil has peaked, or peak oil, so that we much waste billions of dollars in order to save humanity as fuel resources dry up. This is nothing else but a lie, and the use of fear as a tool to take taxpayers dollars and waste them on things like ethanol, which has turned into a disastrous debacle and the source of an endless number of engine breakdowns, especially among small engines. Creating an atmosphere of torment and fear has ended with idiotic waste of time and money, when in reality there are billions of barrels of oil on U.S. land and off it's shorelines. Only the hateful environmentalists and their private agendas generate the type of publicity that makes this typeo of scenario possible, as the thought of drilling into their mother earth is atrocious to these earth worshippers, as they are offended by humans existing, but god help you if you drill into their "mother."

That's my little rant. Now the reality. Just in the rock shale of the United States alone, it is estimated there is far more available proven oil reserves than exists in Saudi Arabia. This is trying to be covered up so Americans don't call the government and radical environmentalists to account for their crimes against humanity by not only lying, but covering up the fact that there is that much oil available for use. This doesn't even take into account the oil off our shorelines or in Alaska. Go beyond that and we have the new methods that can see hidden oil underneath the salt of the oceans, and where Brazil's Petrobras has uncovered billions more in oil fields beneath the ocean floor, and they're just getting started. Add the huge amount in the Canadian oil sands and you get the idea. The idea of peak oil is a joke at this time, and will be for many decades into the future. Those opposing oil and gas companies have been hiding the fact of how much oil is available so they can create a panic in order to get access for their pet projects in relationship to alternative energy. A growing number of those in the energy business are doing the same as tax credits and other incentives "blind" their eyes to the huge source of existing energy we still have.

So the oil and gas industry along with the oil and gas companies are in reality in a strong position in the long term, as oil and gas will flow through the pipelines for decades and decades into the future, which will not only provide many oil and gas jobs, but keep things running while we lose the emotional baggage and slowly look at realistic and legitimate sources of alternative energy going forward. There's absolutely no lack of oil and gas we can drill for and produce at this time, and there is no need to create the false sense of urgency the media has been doing through its going to bed with environmentalists.

Oil exploration needs to continually be encouraged, as well as removing barriers to oil well drilling. Oil development will continue to be a huge business in the world, and the resources out there are still staggering, as far as the amount of oil and gas still out there to be extracted from the earth and underneath the oceans.

Where does all of this leave oil and gas as an investment? It will be a very strong and profitable place to put our money, both over the short and long term.

Once the global recession starts to wind down, demand for oil will increase and go beyond normal levels, and we'll see a huge increase in use and prices. Those investing in the oil industry and oil companies will profit tremendously, as it's discovered that oil resources aren't diminishing at all, but are available in huge quantities. As oil engineers solve some of the cost problems related to extracting oil of shale, along with doing it more efficiently, we'll see this story unfold in the years ahead, as the media, politicians and radical environmentals won't be able to hide it.

Short term we already have the existing contango or super contango condition that allows a safe and guaranteed source of profit via taking arbitrage positions, and as that winds down, we should see oil prices start to gradually rise again. It's only a matter of when the economy turns around; that's what we need to be looking at and measuring our decisions of when to invest in oil by.

So whether it's oil drilling companies, natural gas companies, or oil and gas companies within the oil and gas industry, the future is bright for all aspects of the energy sector. Those investing in oil or gas in the short and long term will find themselves very happy with the profits they take away from it.

1 comment:

  1. i think we are going to see a lot more fluctuation in oil prices over the next 2 years, just a prediction.. good post