This Is the Moment When OPEC Becomes Obsolete

This Is the Moment When OPEC Becomes Obsolete

by | published August 22nd, 2018
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Not that long ago, OPEC had complete control over the international price of crude oil.

Given it constituted more than 40% of all oil produced daily worldwide, how much (or little) the cartel decided to move into the market was the single biggest factor in setting the worldwide price.

In those days, the U.S. was dependent upon foreign producers for almost 70% of its daily oil needs. It had become both an economic and a national security concern, as more than 60% of all production was coming from stripper wells – wells producing less than 10 barrels a day each.

But then the combination of hydraulic fracturing – or “fracking” – and horizontal drilling ushered in a genuine revolution in oil production.

The opening of shale (along with the broader tight) oil and natural gas production revolutionized the industry.

And, over the past decade, something truly unusual has developed as a result…

How the U.S. Stole the Global Energy Spotlight

From barely 4 million barrels a day in 2008, extractions in the U.S. have now reached a record 11 million barrels, with some estimates expecting a rise to 12 million by 2020. That would catapult domestic production into the number one position worldwide.

Believe it or not, American domestic oil production has now pushed OPEC aside to become the gauge for the global balance in supply and demand.

This was no doubt thanks to the budget agreement in mid-December 2015 that let Congress end a more than four-decade prohibition on U.S. crude exports. Just as the shale revolution was gaining steam, the added volume coming started moving out to higher priced foreign markets.

American oil production has become the fulcrum on which international oil trade operates. King Shale has arrived.


One huge reason that King Shale is here to stay is because there are still so many untapped energy deposits across the U.S.

From random fields to seemingly endless deserts, you never know what treasure is buried beneath them.

While many companies have already laid claim to these deposits, sometimes people stumble upon a “motherlode“.

That’s exactly what just happened out West, on a seemingly “worthless” piece of land that was just discovered to contain oil and gas reserves valued at $1.4 trillion.

The U.S. government located this historic treasure trove, but everyday Americans can still profit from this situation.

Even if you live 1,000 miles away, you could become one of them.

Click here to find out how – while there’s still time to be a part of it.

Unlike other new sources of oil – the North Sea being a good example – the U.S. shale largess likely won’t be ending any time soon. Initially, it was thought the flow would begin drying up in 10-15 years. The latest estimates have now pushed that back to 40-50 years.

Several reasons have emerged allowing for this longer-term and more expansive view…

  • Large amounts of additional extractable reserves have been discovered
  • Longer frac segments
  • Better proppants to keep rock fissures open, thereby allowing improved recovery rates
  • Multiple well spuds from the same platform
  • Significant reductions in well head costs
  • And a better ability to gauge the effect of rising volume on prices have also contributed.

Geological surveys indicate that other countries – China, Argentina, Russia, and even Algeria – have more shale reserves than the U.S.

However, it will take years for other parts of the world to begin producing shale and tight oil in any significant amount. That means American producers will be leading the way for some time to come.

The first time around shale oil and natural gas minted a bunch of new millionaires.

But this time around the prospects are even better.

You Can Join This New Group of Oil Millionaires

We are at the outset of a second shale revolution, and this one is taking place as oil prices accelerate. With access to international markets and a more efficient, focused production base, the U.S. will be setting the global pricing picture.

That means select domestic producers with all of the following will provide investors with returns much better than the sector as a whole…

  • Efficient operations
  • Experienced management
  • Completed infrastructure and wholesale drawdown agreements in place
  • Ready access to transport
  • An ability to offset extractions with reserves in the ground
  • And focusing on an already producing well network in high-volume basins.

Unlike the period from late 2014 through 2016, the climate today is much different. Then, the Saudis had led OPEC into defending market share rather than price. That translated into a collapse in global oil prices.

Those days are dead.

An ongoing OPEC-Russian agreement to limit production and significant declines in major producers like Venezuela, Libya, and Nigeria are just two of the many factors contributing to a tight market.

The U.S. continues to hold all the cards and will be serving as the global arbitrator of oil pricing moving forward. That puts the group of lean, niche producers my Energy Advantage subscribers have been making nice money off of in the drivers’ seat.

There may be more money to be made moving forward than at any time during my four decades in this business.

This will be unfolding despite the diversification in energy sourcing internationally. Much has been made of advances in renewables, smart grids, and electric vehicles. Such developments are certainly underway and I have discussed their positive impacts on many occasions here in Oil & Energy Investor.

What is underway is a genuine expansion in reliable energy coming from separate sources. Yet for the next thirty years at least, the world will rely on crude oil, natural gas, and coal as the three dominant sources of energy.

Hydrocarbons still have the central position in the equation.

And with the balance on production and exports gravitating to a choice set of U.S. shale operators, that is just fine with us.

In fact, U.S. operators may be entering a new “golden age” following a discovery from the U.S. Geological Survey (USGS).

What started out as a seemingly “worthless” plot of land stretched across Texas and New Mexico has now turned into a historic treasure trove of energy.

A team of USGS scientists found that the land contains 20 billion barrels of oil and 16 trillion cubic feet of natural gas…

All worth an estimated $1.4 trillion.

Even though the U.S. government found this treasure first, help is now needed to get it out of the ground.

That’s where you can play a role in this story.

This find is so big, it could crown 100 new millionaires a month, every single month, for the next 11 years.

And if you play your cards right, you could be one of them.

Click here to continue reading about this life-changing discovery.



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