OPEC Crack-Up

[dan_s]

Joe Dancy and I were interviewed for this article.

http://watchdog.org/187175/an-opec-crack-up/

[prince_jake_33]

That was a great article The oil sellers must come together in an agreement to cut oil production by a couple of million barrels They should be able bring in Russia I don't think the American companies can join because of legal restrictions. bob jacobson

[dan_s]

The EIA projects OPEC's oil revenues for 2014 will be around $700 billion, an 8% drop from 2013. That doesn't sound that bad...

But at current crude oil prices, the cartel stands to lose nearly $400 billion in annual revenue in 2015. That's a 50% drop from 2013 levels that could seriously threaten some of the OPEC members that rely on revenue to fund social programs.

Fact: This world must have increasing oil supply year in and year out. If the supply of oil EVER starts to decline, you will see the price of crude oil go through the roof. See oil demand chart here: https://www.iea.org/oilmarketreport/omrpublic/

Fact: Existing oil fields decline at 4% to 5% each year. We can never stop drilling because we need to add tens of thousands of new wells each year just to keep production flat.

[dan_s]

From Keith Kohl's newsletter dated December 19, 2014:

So What's Going to Happen?

All of this about OPEC losing half of its revenue in two years and Russia's ruble crashing on low oil prices doesn't mean we know what will happen with oil.

As much as we'd like to, it's impossible to predict how the market will move.

But all common sense points to higher oil prices by the end of next June. And if that's the case, we can safely assume that most oil and gas stocks are a great bargain right now.

This is especially true in North America, where fears of a shale bust have investors fleeing fracking stocks with reckless abandon.

But selling and running away when these stocks are trading at their lowest level in five years is absurd. If you would've bought stocks as cheap as they were in 2009 and held onto them, you would've made a bundle.

So why are people fleeing now? Are they in a panic?

It seems so. I mean, oil isn't going away no matter how low prices go. Companies will always be there to drill for it so long as there's demand.

That means when prices go low, it's time to buy stocks. And this time, we're buying North American.