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This is a Clear Path to Profits (Even in Volatile Markets)

by Dr. Kent Moors | published January 28th, 2014

It was quickly becoming OPEC’s worst nightmare. By the mid-1980s, oil prices had begun to collapse.

What’s more, renegade cartel members were selling more oil than their monthly quotas allowed, which merely made a bad situation even worse.

Ordinarily, that’s was a point when the Saudis usually would step in and cut their own exports.

But by then, the pricing situation had become untenable. Instead, the Saudis embarked on a bold new strategy.

First, they opened up their own spigots and flooded the market with crude. This taught those recalcitrant OPEC members a big lesson about lost revenues.

Second, they also introduced a “netback” pricing strategy that proved to be far more important – both for them and today’s energy investors.

This new strategy considered the entire pricing sequence, using refinery margins (the difference in cost between processing and prices on the wholesale level) as a measure of prices upstream and downstream.

Now, twenty-eight years later, the same netback strategy has made a comeback that has handed us a clear path to profits – even during periods of high volatility.

Here’s how this strategy works…

Profit from the Looming Spike in Crude Prices That the U.S. Oil Lobby Doesn’t See Coming

by Dr. Kent Moors | published December 2nd, 2009

[Editor’s Note: Money Morning recently conducted an extensive Q&A with Dr. Kent Moors on the future of energy. Dr. Moors last wrote about a revolutionary new technology that takes low-value fuel and turns it into a high-hydrogen-content gas.]

John Felmy has been the chief economist of the American Petroleum Institute (API) for years. He’s well respected. And I appreciate his experience. But the two of us disagree more often these days.

We most recently locked horns at Malone University in Canton, Ohio, last week, where we were debating the future of oil. (Actually, when the invitation was made, I was supposed to debate Sarah Palin. But she pulled out to go on the road and pitch a book she didn’t write.)

Nonetheless, something disturbing emerged from the debate.