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The Greatest Investment Theme of This DecadeBy
Thursday, August 14, 2014
It's not too late to grab a stake in the U.S. oil boom...
Yesterday, I shared my experience at the U.S. EIA 2014 Energy Conference last month in Washington D.C. In short, some of the smartest people in the industry, like Daniel Yergin, are projecting U.S. oil production could nearly double from today's levels within the next 20 years.
And that projection may end up being conservative...
As you know, new technology has unlocked vast supplies of oil in the U.S. And these technologies are still in their infancy. The oil industry is 150 years old and we've been fracking for gas for years... but cracking shale for oil is just five years old.
In conventional oil fields, oil production declines about 5% per year, and we recover about 50% of the oil in place. In shale (or "tight") oil fields, production declines 50% per year, and we recover about 5%.
In other words, we're leaving 95% of tight oil in the ground.
There are trillions of barrels of oil in U.S. shale. And as we improve our extraction methods, production estimates will continue to climb.
Our supply will soon overwhelm our existing infrastructure. And we'll need new pipelines, new ports, new refineries, and new laws to accommodate the growth.
Companies are going to spend tens of billions of dollars developing U.S. oil assets. And they are going to turn those billions into hundreds of billions, if not trillions of dollars in value.
Here are a few projects in the works...
Those are just the most recent headlines... but I could list hundreds of new projects planned and under construction. This isn't a mania or a bubble. This is wealth creation at its finest. The U.S. shale revolution is this decade's greatest investment theme.
That's why we believe every investor should own U.S. oil stocks. We're already poised to produce 14 million barrels of oil per day in the next 20 years – far outstripping the major Middle Eastern producers. And as our drilling techniques continue to improve, so will our production rates.
It will take trillions of dollars in infrastructure to accommodate this growth. Huge new volumes of oil must be produced, moved, and sold. And oil companies are now in a massive investment phase. But the returns will be enormous...
For those of you who remember the oil shortages of the 1970's, it's a new day. U.S. oil is primed to turn the global industry on its head. We know how to find it. We know how to produce it. And the world needs it.
This trend is going to last a long, long time. It can bring you and your family all kinds of benefits. The most obvious is the incredible boost it will provide the U.S. economy. The surge of wealth coming out of the ground creates "ripple effects" across all industries. Money earned by the oil industry will flow into retail businesses, hotels, housing, airlines, and restaurants.
You can also make personal investments in the best oil producers, companies that sell services to oil companies, and oil infrastructure firms. These companies will enjoy a huge tailwind for years and years.
If you're looking for a new career yourself, consider the oil business. If you have children thinking about careers, talk to them about the oil business. It's going to need a lot more skilled people over the coming years. You'll be able to find a good job for a long time.
Sure... you've heard a lot about the U.S. oil boom. But despite all the press it has received, it's just getting started... and it's going to last a long time. Don't miss out on it.
Good investing,
Matt Badiali
Further Reading:
Find some of our latest ways to invest in the U.S. oil boom here:
This company is expected to grow its production "by roughly 30% next year."
"There are no signs of this growth stopping as the company continues to find more reserves."
"The most underrated shale right now is the Wolfcamp Shale in West Texas. And there's one key company to watch here..."
Market NotesGOLD IS STILL HOLDING AN IMPORTANT PRICE LEVEL More good news for gold owners: Gold is still holding the $1,250 level.
Longtime readers know that when we started publishing DailyWealth in 2005, we were bullish on gold. We were gold owners years before that. Since then, we've published hundreds of essays on the right ways to own it. We even published a book on gold.
In 2013, gold dropped from $1,700 per ounce to $1,200 an ounce. Several months ago, we noted that gold sellers have tried to push it below the $1,200-$1,250 range several times... only to meet strong buying pressure. This is the area where large buyers like Asian central banks are stepping in to buy gold.
As you can see from the three-year chart below, this $1,200-$1,250 area is becoming a "hard floor" for the metal. If you don't own a gold position yet, here's the place to buy.
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