Many Americans awoke this morning to see that an oil pipeline in Alaska was leaking and had to be shut down. The pipeline accounted for about 8% of US production, not exactly a small drop-off. With supplies already stretched and demand rising, any disruption in oil is met with vicious volatility on the up side. How many other times have we awoken to see other headlines that led to upward pressure on prices? I seem to remember a few: Refinery Fire in Texas, Hurricane Heading toward Gulf, Nigerian Rebels take oil men hostage, Iran threatens to Eliminate Israel, Hezbollah Kills and Kidnaps IDF Soldiers. I do not remember seeing any headlines that sounded like the following: Oil Demand is Decreasing Worldwide, Oil is Being used in Less Products, India and China are Slowing, The Internal Combustion Engine is Finished. The question is when will investors wake to the fact that we are in fact in a long term bull market in oil and gas? Opportunities abound in the US for savvy investors to "grab the bull by the horns". Qualified accredited investors should continue to invest in direct participation oil and gas deals. Look for experienced operators and invest the time to get out to the fields and understand the business. You would not invest in real estate without getting to know the local market would you? There are many states that have independent operators raising money for deals in their area of expertise. I have dealt with operators in Texas, West Virginia, Kentucky, Tennessee, and the midwest, call me any time or email me and I'll pass on a favorable referral. The media has bashed oil companies this past year for excessive profits. Where was the media when the average independent was struggling to stay alive in the 80's and 90's when oil was depressed. Don't be a whining, crying consumer take action..... join the oil/gas party! In my travels across the American oil fields, I have come to meet some of the nicest people in the business world. I have experience mostly in the quick paced northeast in my other endeavors, therefore it is a pleasure to deal with "salt of the earth" folks in the oil heartland. I read this morning that India's GDP was projected to grow at 7-8% next year and China's GDP at 10%. I also read that Lebanon did not accept the cease fire presented by the French and the USA. It is unfortunate that I can not rejoice that oil is rising purely on organic demand, but the terrorism premium that is part of the current oil market does not have any simple way of going away. Hezbollah can be defeated for the time being, but the philosophy will live on, unfortunately. Iran will continue to threaten Israel and seeks to eliminate them from the map. Iraq is heading toward civil war. Osama and Al Qaeda are still active. Hugo Chavez hates the USA and controls big oil reserves. So what will the headlines look like going forward? Will they make the BP news on the pipeline damage today look small? The only way to protect yourself and hedge your portfolio is to invest systematically in oil & gas. |
