Safehaven | Energy Insights | Printer Friendly Version

November 13, 2006

Energy Insights
by Meridian

At Energy Central we have been pounding the table for quite some time now about rising global energy needs and rising global political tensions. I have to laugh at the weak-kneed pansies that call themselves journalists. Oil goes up and all they can blather about is Peak Oil. Oil has a normal healthy correction and they all run for cover and start talking about how the world is awash in Oil and everyone who invests in oil equities is doomed to investing hell forever. Give me a break, you clowns. Take a manly position and stick to it why don't you? One thing you must know right here and right now before you read any further is that we at Energy Central do not suffer from weak knees. We are not like daisies or tulips blowing in the wind hither and yawn. Yes there will be periods when the world is quiescent and the political crazies are asleep. Yes there will be hurricane seasons that are non-events. Yes there will be periods when energy prices do correct. But we will deal with that accordingly as any savvy trader and investor should. Our position is that we are headed for higher energy prices over time and traders and investors who subscribe to Energy Central and come along with us for the adventure will be rewarded. Since launching Energy Central back in June our Trading Summary boats a 77% success rate and an average gain of 10% on our winning trades. Overall, our gains amount to some $44 dollars per share to date. So, subscribers using 1000 share lots to trade our recommendations have made...well you do the math. So, like I was saying....the globe currently consumes over 82 million barrels each and every day of the black stuff we call Oil. There is no sign of any let-up in this demand either. This week the International Energy Agency issued some stern words to those who cared to listen. The IEA says the world's energy supply is heading for crisis and predicts "skyrocketing prices or more frequent blackouts" unless urgent action is taken. The IEA, (an energy policy adviser for its 26 member countries including the UK and US, was established during the oil crisis of 1973-1974), further called on governments to build more nuclear power stations to help cut greenhouse gas emissions and also to take steps to reduce the growth in demand for energy. It predicted that global energy needs will surge by 53 per cent over the next 25 years and that crude oil prices could exceed $100 a barrel by 2030. "On current trends, we are on course for a dirty, expensive and unsustainable energy future. In response, urgent government action is required. The key word is urgent."

I hate to say it - but I told 'ya so. All joking aside folks. As I said above, we are hurtling headlong towards a full blown energy crisis and those of us in the loop and in the know will make huge windfall profits along the way. Here at Energy Central, all we seek to do is offer our readers up to date information on the energy sector to keep them in the know. Each week we go to great lengths to offer our technical insights into at least 6 different energy related stocks. We also take the time to look closely at what is happening with Oil & Gas Futures prices. We even provide you with some valuable comprehensive indices of energy equities updated each and every week.

To give you an example of what our subscribers read each week, I invite you to take a look at the following headlines from weeks gone by:

The global Uranium supply is tight. This week it got even tighter on the news of a total disaster at an under-construction mine site owned by a Canadian firm that currently produces 20% of the world's Uranium. This week I update subscribers and explore ways to turn this unfortunate event into a money making opportunity.
Some say the world is awash in Oil. Some say otherwise. At Energy Central we fall into the "otherwise" category. This week Royal Dutch Shell provided us with yet another shred of evidence to support our position. Find out what Royal Dutch did this week.
America fiddles and fumbles in the Middle East. Meanwhile China very quietly and efficiently goes about her business. This week, the ink was flowing in Russia as a new agreement was signed. I share the details with my readers and again caution to watch China. Someday soon we will all wake up and discover that while we were hopelessly trying to bring democracy to the corners of the earth, China was solidifying her energy interests and building a nice little empire. An empire that will rival America. At Energy Central we are in awe of China - the great machine that is steam-rolling straight ahead.
Pisceance/Uinta Basin. Ever heard of it? You probably should get to know of it. Big things are happening. This week I take my readers on a little journey into this area that was formed in the Cretaceous period.
And it didn't take long. Our friend Mr. Ahmadinejad in Iran just could not keep his lips sealed much longer. This week he poked fun at the US by announcing he would be starting up a second nuclear enrichment unit. He also stated that Iran would cut Oil production as part of the OPEC initiative to curtail production by 1 million barrels a day. This is all too reminiscent of somebody taking a stab at the school playground tough guy. Eventually the tough guy ends up laying a serious ass whoopin' on somebody. Look out Mr. Ahmedinejad. America is that tough guy. America has friends (ie Israel). If you are not careful, you may get an unexpected visit from either America or one of its friends.

This week I have discovered what I think is an attractive gem of a company. Its shares are listed on both Amex and the TSX in Canada. Here is how I introduce this company to my subscribers in this week's Energy Central:

It is one thing to talk about and write about oil and gas. But, at the end of the day, the stuff has to be transported to market via a pipeline system. This involves pipe, valves, flanges, fittings and the like. Where does one go to obtain this? No, not Wal Mart or Home Depot, that's for sure. In Western Canada, energy companies make their way to a company by the name...............

The stock is currently trading at under $12. This is down from its high of $20 back when Oil was pushing $80 a barrel. As Oil prices rise and as demand for this company's products continues to grow, the smart folks owning this stock will make some serious coin. Next week for my readers I will be taking a look at the Fayettville Shale play in Arkansas. There are a number of interesting companies active in the area. I suspect I might just uncover a few hidden gems in my research.

Crude Oil - Long Term

As for Crude Oil, despite what you may have gleaned from listening to the "bubbleheads" on CNN or from reading your local paper or from numbing your brain by reading some weak-kneed columnist, Oil is not falling apart. We are very much in a long term uptrend. The recent pause in the action is quite a healthy development really. No market rises indefinitely from lower left to upper right on the charts. While the investing masses out there cower in fear of the future, we at Energy Central are taking the opposite stance. We are stepping up to the plate and showing our readers a goodly selection of beaten down energy stocks. You can choose to follow the masses like some timid sheep. Or you can stand up and admit to yourself that energy is in a long term uptrend. The choice is yours to make. Choose the former and you are on your own. Choose the latter and Energy Central will welcome you aboard with open arms.

Natural Gas - Long Term

Again, it feels like we have been through a freakin' meat grinder on Natural Gas and Natural Gas related stocks. But, take a step back and look at this chart. Technically, the long term uptrend on Natural Gas remains intact just as it does on Oil. Gas wells across North America all suffer from one commonality - decline rates. Drill a gas well, put it on production and it declines up to 25% a year (more in some cases). We have to keep drilling each year just to keep up with the natural declines. Two weeks of unseasonable cold weather on the eastern coast of North America this winter will chew up the surplus of Gas in storage. Then watch the fireworks fly. My comments above also hold here. You can quiver in fear in the corner along with the investing masses or you can stand up and assert yourself. Choose the former and we cannot help you. Choose the latter and Energy Central will be your guide to profitable trades in the Gas sector.

Whew!! Nothing like a good rant to invigorate a person. Now, why not invigorate your investment portfolio. Point your browser to www.themarkettraders.com and have a good look around the site. You'll be glad you did.

www.themarkettraders.com