Multimedia Weekly Digest: Surging Oil Prices

Shutterstock photo
By SA Multimedia :

Welcome to SA Multimedia Digest, where we combine videos and podcasts from across Seeking Alpha's contributor base into a single weekly article.

Oil expert and geological consultant Art Berman returned to Chris Martenson's podcast this week and covered the surging price of oil:

The price of oil has gone up like 30 or more percent just here in the last year. Some of that - in fact a lot of that - is there are some very good reasons. In the United States, we have been drawing down our reserves, our inventory, and the amount of oil we have in storage consistently since February of 2017. We are going into the fifteenth month of almost every week taking oil out of what we have got in storage because we are not producing enough to meet the need...

I said the Bakken has peaked. It may come up again close to what it did. It has not even worked. It has declined every month in 2018. Let us get to the big kahuna. Let us get to the Permian Basin. Permian Basin, the EIA has always underestimated their reserve. I did it myself. I just added up all the numbers that companies list in their annual reports. Then I did a conscientious extrapolation between the 50% of production those guys represent, and the other 50. I came up with six billion barrels, okay. Six billion barrels is a lot of oil. Run it through the same scenario. What you find is that we run out of that six billion barrels in about 2025. That is assuming production rates do not increase, and they are increasing all the time.

How are gold miners and inflation affected by surging oil prices and what does that mean for central bank policies? John Rubino joined Jay Taylor's weekly podcast and answers those questions.

SA's own Gil Weinreich discusses geoeconomics and the current oil price trend:

A CNBC headline proclaims that the " oil market is ignoring the big Iran story ." Is there something one analyst CNBC interviewed understands that the oil market does not? To the contrary, in this brief podcast (3:22), I argue that the market has correctly figured out what Saudi Arabia's current interests are, and what Russia's interests are, and that, as they go, so will go oil prices for now. Fears of a "nasty" Iranian response to U.S. sanctions, voiced by one analyst, are not relevant to the current oil price trend.

And what does the surging price of oil mean for energy stocks? Janus Henderson Investors weighs in.

Until recently, energy stocks have failed to keep pace with the surging price of crude. Now Lead Energy Analyst Noah Barrett sees potential for well-managed, upstream and midstream companies to benefit from the highest spot prices for Brent and West Texas Intermediate oil in almost four years.

Saudi Arabia and Russia are showing no signs of breaking with coordinated production cuts, and while U.S. output is rising quickly, the risk is it will miss to the downside. Therefore, there is a greater probability that crude prices will reach $90 a barrel than fall back below $60, while the spread between Brent and West Texas Intermediate is likely to remain wider.

The outlook is positive for energy stocks relative to the broader market through 2018 and beyond, as analysts raise their price decks for oil, leading to upward revisions in earnings estimates, higher price targets and making the sector more appealing to generalist investors.

As much as 80% of incremental U.S. production is concentrated in the Permian Basin, leading to bottlenecks that favor high-quality exploration and production companies, and midstream operators in the region that allocate capital responsibly and set budgets well below the spot price of oil.

SA Podcasts

How Delta Is Gaining Ground (Podcast)

Italy's Failure To Form A Governing Coalition Seen As Referendum On The E.U. (Wall Street Breakfast Podcast)

Fed To Roll Back Volcker Rule; Trump Moving Ahead On China Tariffs (Wall Street Breakfast Podcast)

A Memorial Day Portfolio (Podcast)

You can find and subscribe to all our SA podcasts on iTunes here .

Other SA multimedia

How To Triple Your Money In Three Years (Kirk Spano)

Booming Demand And Big Returns Coming For The 'New Micron' (Joe Albano)

Advisors Vs. Volatility: Who Won?

Financial Exchange Stock Talk: Joe McCann On Loxo Oncology

Podcast: Facebook, GDPR, Alexa Recording, Samsung Bixby, Intel AI

This Week In Money - May 26, 2018

Wave Of Stock Buy-Backs Keeping Equities Afloat?

Mining Stocks Are Historically Undervalued

Invested Ep. 158 - Stock Market Indicators: Can You Time The Market? (Part 1.5)

Market Update: Last Days Of May

User And Subscriber Businesses: The Good, The Bad And The Ugly!

How Might Markets Fare The Rest Of The Year?

Muni Supply-Demand Forces Awaken In 2018

Q2 2018 Investment Outlook: Commodities Seizing Its Moment

Peter Schiff: The Fed Is Going To Destroy The Dollar

Ep. 63: Investors To Italy And The EU - Che Cosa Succede?

The Ticking Time Bomb Edition

BoC Holds Rates: Markets Move And July Hike Expected

Please share your thoughts in our comments section. Have multimedia for us to include in the Digest? Please message us or email multimedia@seekingalpha.com.

See also Cantel Medical Corporation 2018 Q3 - Results - Earnings Call Slides on seekingalpha.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Symbols: USO , UCO , SCO , XOP , BNO

More from SeekingAlpha



Market Commentary

Research Brokers before you trade

Want to trade FX?