{"id":57729,"date":"2011-02-17T09:44:04","date_gmt":"2011-02-16T22:44:04","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2011\/02\/17\/us200-a-barrel-oil-this-man-says-no-way\/"},"modified":"2011-02-17T09:44:04","modified_gmt":"2011-02-16T22:44:04","slug":"us200-a-barrel-oil-this-man-says-no-way","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2011\/02\/17\/us200-a-barrel-oil-this-man-says-no-way\/","title":{"rendered":"US$200 a Barrel Oil? This Man Says, \u201cNo Way!\u201d"},"content":{"rendered":"

\n\t– One Saudi oil expert doesn't believe predictions of oil priced at US$200\/bbl are realistic<\/strong><\/p>\n

\n\t– He suggests investors should focus on alternative fuels, which will only become more important<\/strong><\/p>\n

\n\t– Natural Gas is one such alternative<\/strong><\/p>\n

\n\t <\/p>\n

\n\tby David Fessler, Investment U’s Energy and Infrastructure Specialist
\n\tTuesday, February 8, 2011<\/p>\n

\n\tHogwash.<\/p>\n

\n\tThat’s one man’s verdict on the chance of seeing oil prices top the US$200 per barrel mark.<\/p>\n

\n\tThat man is Nansen Saleri, President and CEO of Quantum Reservoir Impact, and former head of reservoir management at Saudi Aramco.<\/p>\n

\n\tHe appeared on CNBC’s “Squawk Box” show this morning and was asked about the chance of Egyptian unrest causing oil prices to spike even further – and he downplayed the effect it would have on world markets:<\/p>\n

\n\t“Egypt only produces about 750,000 barrels of oil a day, which is a little less than 1% of the total world output of 82-83 million barrels a day.”<\/p>\n

\n\tWhen asked what would happen if the Suez Canal and the SuMed pipeline were shut down, he noted:<\/p>\n

\n\t“The capacity of the canal and the pipeline together are about four million barrels a day. But currently, only about 1.6 million to 1.7 million barrels are flowing through it. That’s less than 2% of the total liquid supply globally.<\/p>\n

\n\t“Couple that with a 2-3 million barrel extra supply in the Middle East (particularly in Saudi Arabia), and nearly as much floating around the world in tankers, the 2% variability is really miniscule in terms of the big picture.”<\/p>\n

\n\tAnd when asked about he thought would be a “fair price” for oil, he simply said, “It’s based on what people are willing to pay.”<\/p>\n

\n\tTranslation: Good old supply and demand at work, once again. And it’s one reason why companies like ExxonMobil (NYSE: XOM) and Petrobras (NYSE: PBR), will continue to fare well in the months and years ahead.<\/p>\n

\n\tBut so much for me thinking this was just going to be another interview about oil prices. Saleri then started singing my tune…<\/p>\n

\n\tThe Global Energy Wars<\/strong><\/p>\n

\n\tHe said we’re now in the most global competitive market for energy in history, with conventional oil just one of the players.<\/p>\n

\n\tThe others? Natural gas, wind, nuclear, solar, geothermal, and even biofuels. They’re all competing against one another… and against conventional oil.<\/p>\n

\n\t“From an [energy] supply perspective, the globe is entering a far more free market-oriented environment. Diversity in the energy supply is a stabilizing force,” said Saleri.<\/p>\n

\n\tThis ultimately benefits the consumer, by keeping supply in line with increasing demand. Saleri continued: “On an equivalent BTU basis, natural gas is about one third the cost of oil. Clearly this is not sustainable.”<\/p>\n

\n\tHear, hear! That’s one of the reasons that T. Boone Pickens is so high on natural gas. It’s cheap, we have an abundant supply and we can put it to use in this country in transportation, heating, and power generation immediately. No advanced technology required.<\/p>\n

\n\tIn fact, we’re doing just that…<\/p>\n

\n\tThe Equation is Simple: Energy = Profits<\/strong><\/p>\n

\n\tNatural gas accounts for about 55% of our total energy supply, with oil down to about 39%. Renewables makeup about 6%, but are the fastest-growing segment.<\/p>\n

\n\tThat’s one of the reasons why companies like First Solar (Nasdaq: FSLR) will continue to make gains in this new, competitive global energy supply market. The stock is up 40% over the past year and has surged by more than 500% over the past five years.<\/p>\n

\n\tSaleri’s parting comments sum it up rather succinctly: “You won’t see US$200 [a barrel oil]. There are fundamental reasons why you cannot see US$200 when you have so much gas available. Solar, wind nuclear, and other alternative energies are there to take a share. US$200 a barrel oil is out of the question.”<\/p>\n

\n\tThat’s just one man’s opinion, of course. But he makes a very compelling argument for investing in just about any form of energy. We’re going to need them all – and all should do well in the coming months and years ahead as the global economic recovery continues to accelerate.<\/p>\n

\n\tAnd that’s exactly why I created my Peak Energy Strategist service: To focus exclusively on the massively important trends within the energy and infrastructure sectors – and show investors how to profit from them.<\/p>\n

\n\tGood investing,<\/p>\n

\n\tDavid Fessler<\/p>\n

\n\tReprinted with permission of the publisher. The above story can be read on the website www.investmentU.com. The direct link is: http:\/\/www.investmentu.com\/2011\/February\/will-oil-prices-reach-200-a-barrel.html<\/p>\n

\n\tNothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.<\/p>\n

\n\tViews expressed are not FNArena's (see our disclaimer).<\/p>\n","protected":false},"excerpt":{"rendered":"

Investment U’s David Fessler explains why investors should look at alternative fuels.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[24],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57729"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=57729"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57729\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=57729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=57729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=57729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}