Oil & Energy Investor by Dr. Kent Moors

All’s Fair in War and Oil

by | published December 15th, 2018

They say all’s fair in love and war.

I say all’s fair in war and oil.

When it comes to digging for “black gold,” any stretch of land, water, or ice is fair game.

So, you can go from the deserts of Saudi Arabia to the dry dust of West Texas to the waters of the coastline to find this vital fuel…

No to mention the cold desert of the Arctic.

It’s long been known that the Arctic holds oil frozen under its icy top layer, and getting to it is quite the challenge.

More so, even, than extracting oil out of the waters of the ocean.

The Arctic region encompasses 19 geological basins – only half of which have been actually explored.

In 2008, the United States Geological Survey (USGS) estimated that there are 90 billion barrels of undiscovered, recoverable oil in 25 identified areas in the Arctic – 13% of all the undiscovered oil in the world.

Now, despite the challenges of the region, many nations around the world are determined to take control of this land and its abundant natural resources.

Which leads to some increasing tension adding to the existing conflict I’ve discussed many times here in Oil & Energy Investor.

The Arctic situation has remained fairly stagnant for the last several years, at least compared to other areas of oil exploration.

But a move by one of America’s energy rivals has brought it back onto the map of world tensions…

I’m talking, of course, about Russia.

New Drones, New Technology

The U.S. and Russia have had a long and colorful history together.

An alliance during World War II escalated into a firm rivalry during the Cold War, and relations between the two never truly warmed back up to pre-Cold War levels.

And these days, Russia has been in the news regarding U.S. relations more so than usual.

But it’s what they’ve announced recently that has my attention.

Last week, Russia unveiled two drones – the ZALA 421-08M and ZALA 421-16E.

What makes these drones unique is that they don’t rely on GPS, and are designed to gather information about a vessel from 100 kilometers away.

And they’ve been deployed to the Arctic to spot ships approaching oil and gas facilities in the region.

This is only the latest in a string of increased military involvement in the Arctic.

And according to Samuel Bendett, an analyst at the Center for Navel Analyses’ International Affairs Group, “Russia views the Arctic as an area vital to its national security – for the defense of the nation, for the economic development, and for environmental factors.”

Back in March, Russian President Putin asserted his country’s claim to the oil underneath an Arctic glacier, saying “Natural resources, which are of paramount importance for the Russian economy, are concentrated in this region.”

In other words, he has every intention of drilling what he claims to be $30 trillion worth of oil in the Arctic region.

But Russia is going to have to fight the U.S. for it.

Among others.

“Hidden” Complex Conceals America’s New Superweapon

Four Reasons Why Oil Prices Remain Sluggish

by | published December 13th, 2018

During my career, I’ve found myself intimately acquainted with airports. Sometimes it seems as though I’ve spent more time on airplanes than in my own home.

I am about to get on an airplane again, this time bound for our home base in Baltimore and meetings with staff.

And while I sit in the lounge and wait for my flight, I have a continuation of the discussion in the last Oil and Energy Investor in mind that I think we should undertake today. 

I’m not one to be a drone to my phone, so when I have a long wait, my attention tends to go to what’s happening out the window. And watching the comings and goings of the planes to and from their designated parking spots is strangely calming.

Not to mention evocative.

See, when it comes to rising and falling, the markets tend to emulate flight patterns.

Until they stall.

Much like the oil markets these days.

Now, this is not going to be an easy read but it is important.

Earlier this week, I described the reemergence of an accentuating debt concern among U.S. oil and natural gas producers.

Nothing would deflect this rising problem more than a rebound in crude prices.

Well, today I am considering why, with all the factors that would seem to dictate higher prices, oil has remained under so much pressure.  

Here is my conclusion