Energy Prospectus

There is very little spare oil production capacity remaining in the world.

Read: https://www.linkedin.com/feed/update/ur ... 1891822592

Per IEA, demand for oil will ramp up in Q4 at the same time the full impact of the U.S. sanctions against Iran kicks in. Q4 should be very profitable for investors in high quality upstream companies.

"Per IEA, demand for oil will ramp up in Q4 at the same time the full impact of the U.S. sanctions against Iran kicks in. Q4 should be very profitable for investors in high quality upstream companies"

This is not secret stuff. We (oil investors) have been talking about this for months. First issue was "Are sanctions on Iran going to happen again?' We were going to be rich if it did because "everyone knew" that without the Iranian oil supply, crude will spike.

Now, everyone knows that sanctions will remove these barrels from the market, but oil E&P prices (broadly represented by XOP) are little changed overall. May 1 XOP was about $39.50 and is now about $41.50. It has been very frustrating and I am not sure if Q4 will be as profitable as we have all been hoping for the past year. Hope I am wrong

For share prices to move higher and align with the reality of how profitable most of the upstream companies are at today's oil, gas & NGL prices, there needs to be a "Paradigm Shift" on Wall Street. The energy sector has been out of favor since mid-2014 because the Wall Street Gang has been repeatedly burned for recommending it. Money managers seem to be more comfortable investing in the tech "story stocks", bitcoin or cannabis.

Just about everything points to a much tighter global oil market and higher oil prices, but investors remain more focused on the FEARS than the opportunity for profit. The list of FEARS that have been debunked is getting quite long. Examples include:
"Peak Demand"
Electric vehicles will quickly replace ICE vehicles
OPEC will cheat on their production quotas
Permian Basin production will flood the market and we will have an oil "glut" forever
All of these fears are silly because 99.9% of people cannot grasp how big and how important the global oil market is. Humans are burning up close to 100,000,000 barrels of hydrocarbon based liquids per day (36.5 Billion barrels per year) and proven reserves are not growing that fast. Rationing of supply by price is the only real solution at some point.

My personal belief is that the situation with Iran is much more serious than most people realize. I believe Israel and Saudi Arabia are pushing Trump to take out Iran now, before they have anymore nuclear capability. Sounds like a smart move to me. Today we are at war with Iran in Syria, but no one seem to notice. I think there is a very good chance that we see a joint U.S. + Israel air strike on Iran's nuclear facilities late this year. That will be a MAJOR PARADIGM SHIFT.