Oil Outlook 2020: Tanker Madness

This is the one sector in the oil market where investors can find healthy profits. Energy and Capital editor Keith Kohl takes a closer look at oil prices in 2020 and shows investors one sector in the oil market where they can find healthy profits. You are receiving this email because you subscribed to Energy and Capital. [Click here]( to manage your e-mail preferences. [Energy and Capital logo] Oil Outlook 2020: Tanker Madness [Keith Kohl Photo] By [Keith Kohl]( Written Oct. 16, 2019 You’d be surprised how many people ask me what the price of oil will be in a year. What’s more interesting is the look on their faces when I tell them what it would cost them, right down to the penny. If you wanted to buy a barrel of oil right now and take delivery at some point in October of 2020, it would cost you exactly $51.46 per barrel as I write this. No, I’m not reading any tea leaves, nor am I scouring over some obscure quatrains written by Nostradamus in the 16th century. It’s simply the way the futures market works... with a few caveats, naturally. You wouldn’t just be buying a single barrel of oil, since the contract would be for 1,000 barrels of West Texas Intermediate (WTI). That’s if you’re looking to buy right now. Now, asking which direction oil prices will head over the next year — that’s a different story. Let’s take a look... Turn every $2 into $2,500 I just got off a conference call with the management of a little-known $150 million West Texas oil explorer. On the call, they revealed the discovery of $185 billion worth of oil under their land. This means for every one of this company’s $2 shares you buy, you’re buying $2,500 worth of oil. This is a recipe for massive windfall profits. [Here’s my full write-up and recommendation.]( Oil Outlook 2020 Which way will oil prices go? According to the EIA’s [Short-Term Energy Outlook](, WTI prices will average $54.43 per barrel in 2020. Although we would be in a better spot than we were in 2017, it would mark the second consecutive year-over-year drop in oil prices. Take a look at this: [eia oil balance] As you can see, the EIA is expecting the market to tighten heading into 2020, followed by downward pressure on prices during the first half of 2020 as global inventories rise starting in the second quarter. Meanwhile, the International Energy Agency (IEA) seems even more bearish on oil prices. The IEA recently cut its demand forecast for 2019 by 65,000 barrels per day in its monthly oil market report. It even cut its demand forecast for next year by 105,000 barrels per day and now expects global consumption to grow by 1.2 million barrels per day in 2020. That would make it the weakest year for demand growth since 2016. And yet there’s one thing we can’t ignore: The world’s thirst for oil is reaching incredibly high levels. In 2020, global demand is expected to top 101.5 million barrels per day. I think both of their projections are forgetting something. Look, geopolitical volatility in the Middle East is certainly nothing new to us. But we’re starting to reach uncharted territory here. Think about it... The Saudis just shrugged off an unprecedented attack on their oil facilities that knocked out HALF of their output, and it failed to really move the dial on prices. Imagine what it would take to push crude to $100 per barrel. It may not be an attack at all, actually. All it could take is a slowdown in U.S. tight oil. I’m not talking about a natural peak in production, mind you, but rather a slowdown in drilling that will ultimately lead to less U.S. crude on the market. In the latest Baker Hughes rig count, it showed that there are 207 fewer rigs drilling in the United States than there were a year ago — more than half of that loss was seen in Texas. And even though we aren’t expecting crude prices to spike in 2020 without some horrific catalyst in the Middle East, that doesn’t mean investors need to go empty-handed in the oil sector. You just need to know where to look. Have you heard of these Superpower Checks? $1,818 each This is news to most Americans... but Congress unanimously approved a program that’s sparked a $270 billion spending spree across America. Part of this spending is required to be paid out to everyday Americans in the form of these American Superpower Checks. You could collect up to 24 per year — each worth $1,818 or more. [Go here for full details and to sign up.]( Tanker Madness So crude prices aren’t going to overwhelm anyone, at least not in the short term. Not with 12.6 million barrels of U.S. crude oil flowing out of the ground right now. But that doesn’t mean there isn’t an opportunity for investors. I’ll show you one to keep an eye on right now. For months, we’ve seen Iran play a cat-and-mouse game against the world by seizing several oil tankers this year. It had gotten to the point that the British navy had to start escorting UK-flagged ships passing through the Strait of Hormuz. And it’s one of a number of reasons the tanker market has been so strong lately. There’s no question that the geopolitical chaos engulfing the Middle East has helped boost oil tanker rates. Daily rates for VLCCs (very large crude carriers) heading from the Persian Gulf to China have exploded roughly 90% higher during the first week of October. Suezmax rates more than doubled. Now couple that geopolitical chaos with the fact that President Trump slapped sanctions on China shipping companies, and you have a recipe for an extraordinarily strong tanker market. When traders stopped booking supertankers operated by COSCO, which accounts for about 3% of the VLCC market, it caused immense pressure on tanker rates. Remember that this is on top of the more than 200 tankers being avoided for carrying Venezuelan crude oil. Investors like us who had been patiently waiting for the tanker market to gain strength were rewarded with stocks like Nordic American Tankers, which surged 80% in just two weeks. Tanker company Frontline Ltd. has jumped nearly 70% since August. This won’t be an overnight affair. Still looking for a winner over the short term in the oil market? This is it. Unless, of course, you think the tensions in the Middle East will subside anytime soon, or Trump will decide to let China off the hook and buy more Iranian crude. Don’t hold your breath. Until next time, [Keith Kohl Signature] Keith Kohl [[follow basic]@KeithKohl1 on Twitter]( A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of [Energy & Capital]( as well as Investment Director of Angel Publishing's [Energy Investor.]( For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's [page](. [in-case-you-missed-it-banner-550]( 2019 Is the Year of Clean Energy This summer, the International Energy Agency made a firm declaration: The time is right to tap into hydrogen’s potential to play a key role in a clean, secure and affordable energy future. Once a laboratory experiment, hydrogen has now become the most efficient and economical source of alternative energy. Major companies like Google, Apple, Amazon, and more have pledged to completely use alternative energy... some by next year. But to meet their goal, these companies are going to need equipment from a third-party source. And there’s a tiny company’s quickly setting itself apart from its competitors. Its clients already include the U.S. military, a frenzy of Fortune 500 companies, and many more. Between all these impressive partnerships, this stock could easily shoot up to 15 times where it is today. So if you’re interested in this breakthrough and want to make 1,587% gains in the process... [Then click here now.]( Enjoy reading this article? [Click here]( to like it and receive similar articles to read! Browse Our Archives [The Market Cycle Says What?]( [California Drivers Paying Over $5 for Gasoline]( [Investing in Africa Cannabis with Halo Labs (OTCBB: AGEEF)]( [Cobalt Forecasts 2020: Risk, Reward, and Redemption]( [Find the Lie in the Market and Exploit It]( --------------------------------------------------------------- This email was sent to {EMAIL}. It is not our intention to send email to anyone who doesn't want it. 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