9/19/2017 The Catfish still holds to the same opinion.
NAMAZU ON THE PRICE OF GAS AT THE PUMP
|Namazu , Giant Japanese Catfish And Former Demigod Turned Analyst|
Bipeds, lend me your ears. I wish to expand a bit on some observations and opinions and advice I offered in my series "NAMAZU FULLY LOADED, THE FUTURE OF AMERICA. In the final portions of that series I predicted that 'Tight Formations" or "Tight Sands" discoveries of oil and natural gas were poised to make the United States a net exporter of first natural gas, and later refined oil products. I still believe that but never intended to imply that the price of gasoline at the pump in America was ever going to decline. The problem is that all of the new oil being discovered not only in the United States but around the world is expensive to produce. Drilling and production methods for "DEEP WATER" areas and on shore "Tight Formations" are technologically complex and expensive. The oil companies can't sell their product for less than the cost of production. There is very little production of cheap oil going on out there. U.S. shale oil production has wellhead costs that require a minimum break even price of $55 to $80 a barrel. Russia, another oil producer coming on line stronger every year, has a break even cost at the well head of about $120 a barrel. Saudi oil is running about $90 a barrel break even price at the well head. Together Saudi Arabia, The United States, and Russia account for about 35% of the world's production. Oil prices are set by the highest priced producers. Everyone with cheaper oil pegs their price with the abundant but far from cheap oil of the big producers.
Another factor upholding well head prices is the growing list of non producing nations with growing oil consumption. These nations pay a premium for oil to insure that they get enough. In 2012 Phillips 66, Valero, and Marathon oil exported over 531,000 barrels of refined American product from America to these premium paying nations. Despite Republican promises associated with the "Drill Baby Drill" campaign you will probably never see $2.50 a gallon gasoline again. But keep in mind the personal investment advice that I gave you in NAMAZU FULLY LOADED, THE FUTURE OF AMERICA. Don't invest in oil drilling and production companies. Their fortunes are linked to the rise and fall in crude oil stocks, impossible to predict or control and subject to constant government meddling. Invest instead in the stocks of petroleum refiners and transporters. These will be around regardless of prices at the well head and charge what the market will bear over their costs. But you must examine these in the same way that you would examine any corporate stock. You want the tanker operators, pipeline owners, and refiners who have savvy management, and sound financials. Use caution, seek professional advice and invest in oil and gas transportation and refining; they are going to be moving a lot of oil and gas around the planet in the coming decades. Improve your personal wealth. Waiting around for gas prices to fall at the pump is a pipe dream. Invest , make more money then pay what you have to at the pump, you're going to have to pay the elevated prices anyway.
I hope I didn't burst too many bubbles, but based on some of your e-mails ,a few of you tend to grab onto some of my pronouncements and run with them in strange and dangerous directions. Get that catfish perspective, look at things in depth, before you gulp!
Peace and prosperity biped friends, and thanks for reading my stuff.
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