Energy Prospectus

Overview

The North American Oil & Gas Industry is firing on all cylinders resulting in a glut of crude from the Northern U.S. Bakken shale play. Canadian oil sands have additionally swollen inventories and lowered U.S. Oil futures relative to Brent crude substantially. Canadian oil sands production is in essence isolated and priced at an average discount to Brent crude of approximately $23.50 per barrel throughout 2011.

Money is never left on the table in the Oil & Gas industry and this time is no different. It takes time to get the necessary pipelines in place to collect and distribute the immense new production coming online the Bakken and Canadian oils sands. Nevertheless, Enterprise Product Partners (EPD) and Enbridge (ENB) in a recent filing showed they were two weeks ahead of schedule on the planned reversal of the Seaway pipeline aimed at alleviating oversupply in the central United States. The project should be completed by mid-May.

This is also very good news for CLR and our other Bakken companies as oil prices in North Dakota should drift higher.

Full article: http://seekingalpha.com/article/506551- ... urce=yahoo

Washington (both sides of the isle) want to blame high oil prices on those evil speculators. The NYMEX crude oil market is very active with extremely high volumes of trades. Therefore, it would be very difficult for any "speculator" to drive up the price. They would be taking a huge risk if they drove the price way over the fundamentals.

Crude oil supply/demand is very tight. Saudi Arabia is producing flat out and selling every drop.

There is a glut at Cushing, OK which is only thing keeping WTI down. That is a transportation issue that will be fixed eventually.

April 18: Credit Suisse Commodity View: Credit Suisse has updated its commodity
price view with the expectation that global growth moves above average
over the coming months, suggesting that many markets are likely to tighten
further. The rebound is seen being led by the US, with the world’s largest
economy on the verge of a “self sustaining recovery”; China is also likely to
strengthen modestly over the year. Please see the report Commodity
Forecasts: “The Pause That Refreshes…” for greater detail.
■ Oil & Gas Price Outlook: Against this macro outlook, Credit Suisse expects
the price of Brent oil to creep up further in H2 and over the medium term,
with the risks firmly to the upside (supply disruptions). Expectations for Brent
pricing are currently US$125, US$132.50 and US$135 per barrel for 2012E,
2013E and 2014E, respectively.


This means WTI should be over $110/bbl by Q3