Are You Looking at the Oil Sector the Wrong Way?

Energy and Capital editor shows investors one safe haven for oil investors during an oil glut. Energy and Capital editor shows investors one safe haven for oil investors during an oil glut. [Energy and Capital logo] Are You Looking at the Oil Sector the Wrong Way? [Keith Kohl Photo] By [Keith Kohl]( Written Mar. 25, 2020 Are you looking at the oil sector the wrong way? I know it looks ugly from the outside. And I certainly wouldn’t blame anyone for being cautious, especially when your eyes turn toward a chart of oil prices in 2020. I should warn you, it’s about as bad as it gets: [oil price drop] But just because the bears are in full control doesn’t mean you can't turn low prices to your advantage. No matter how low oil goes from here, there’s always an opportunity that’s ripe for the picking. I’ve bought three new oil stocks since oil prices took a running jump off a cliff a few weeks ago. It was the first in a series of trades that I’ve been waiting a long, long time to pull the trigger on. Look, I know it’s easy to see the blood in the streets. In the oil and gas sector, a lot of very difficult decisions are going to be made as companies slash spending across the board and hunker down for the long haul. Some of those companies learned their lessons from the last price crash and will be able to weather this storm. Others haven’t and are hurtling towards bankruptcy. That’s what happens when prices fall more than 60% in less than three months. And despite the bloody waters in the market, all three of those trades are running in the green. Here’s a look at how just one of those oil stocks has performed over the last four weeks: [oil stock jump] How many stocks do you know that have jumped nearly 70% throughout this mess? That success wasn’t based on luck, and it certainly wasn’t a secret, either. In fact, I’ve told you [exactly]( where my trading focus will be during a period of low commodity prices. If there’s one thing we’ve learned by now, it’s that there’s always money to be made in oil… crash or no crash. Less Than $1,000 Could Make You a Millionaire It’s no secret that the conflict in Iran is reaching a breaking point. And though that hardly sounds like good news, there is an incredible silver lining. Because the last time tensions escalated like this, hundreds of people became millionaires... overnight. This time it’s your turn to become one of those overnight millionaires. [Click here to find out how.]( Crude Realities: From Bad to Worse Don’t get me wrong, dear reader, things are about to go from bad to worse for oil prices. Not only has the global economy ground to a halt over this pandemic, but this all but ensures that one helluva oil glut is looming ahead. Rystad Energy recently projected that the greatest supply glut we’ve ever seen in a single quarter is right around the corner, creating a supply/demand imbalance of around 10 million barrels per day. Its analysis also shows that roughly 76% of the world’s oil storage is at capacity. Throw in a little production war between Russia and Saudi Arabia, and things look even more grim. Fortunately, history has a little knack for repeating itself. The only difference is that this time around, you’ll be prepared. 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.]( Like I said, it’s not random luck that certain stocks are able to weather oil price crashes better than others. Last week, I told you about the growing strength in the tanker markets. If Rystad’s ominous projections come true, and we’re faced with an unprecedented supply glut, those VLCCs will become wildly profitable for large producers that need a place to park their crude. In the meantime, there are other actions that individual investors like us should be taking right now — finding those hidden gems. Specifically, we should be identifying those value-priced companies whenever they pop up. Two weeks ago, I mentioned Valero, one of the largest oil refiners on the planet. After the 2008 financial crisis, when oil prices plummeted to $26 per barrel, investors were given the opportunity to pick up shares of Valero for under $15. The availability of cheap crude helped push shares 726% higher over the next decade! Today, the stock is trading at under seven times its trailing 12-month earnings, offers us an 11% annual yield, and will be poised to make a monster comeback when the world’s economy gets kick-started again. The first rule in energy profits is to always think long term. Although we haven’t hit bottom yet, we’re close. Don’t make the same mistake that many investors made during the last oil crash. The smart money will be perfectly positioned for the next leg up. I can only open the door… [t]([he next step is up to you.]( 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](. Enjoy reading this article? [Click here]( to like it and receive similar articles to read! Browse Our Archives [A 72,733.3% Gain in 20 Years]( [Price Drop Means Massive Demand; Bullion Dealers Sell out of Gold, Silver]( [Gold/Silver Ratio at 4,000-Year High]( [How to Get Paid While Supporting Local Businesses]( [How to Successfully Trade at the Bottom of the Barrel]( --------------------------------------------------------------- This email was sent to {EMAIL}. It is not our intention to send email to anyone who doesn't want it. If you're not sure why you've received this e-letter, or no longer wish to receive it, you may [unsubscribe here](, and view our privacy policy and information on how to manage your subscription. To ensure that you receive future issues of Energy and Capital, please add newsletter@energyandcapital.com to your address book or whitelist within your spam settings. For customer service questions or issues, please contact us for assistance. [Energy and Capital](, Copyright © 2020, [Angel Publishing LLC](. All rights reserved. 111 Market Place #720 Baltimore, MD 21202. The content of this site may not be redistributed without the express written consent of Angel Publishing. Individual editorials, articles and essays appearing on this site may be republished, but only with full attribution of both the author and Energy and Capital as well as a link to www.energyandcapital.com. Your privacy is important to us -- we will never rent or sell your e-mail or personal information. Please read our [Privacy Policy](. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. [Energy and Capital]( does not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. The publisher, editors and consultants of Angel Publishing may actively trade in the investments discussed in this publication. They may have substantial positions in the securities recommended and may increase or decrease such positions without notice. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question.