The Part that Obama Got Completely Wrong

Forward to a Friend Having trouble viewing this issue? Click here. Refer a Friend to Energy and Capital.

The Part that Obama Got Completely Wrong By Keith Kohl | Thursday, January 26th, 2012 They're playing a global game of chicken. At stake: nearly one-fifth of the world's oil supply. And it appears as though nobody wants to flinch first. Sure, we've heard the bluffing before; but the latest warning from Iran that they will definitely close the Strait of Hormuz if the EU oil embargo interrupts their crude exports could prove disastrous. Of course, Obama made his position clear during his State of the Union address on Tuesday night — and it didn't bode well for a peaceful resolution: The regime is more isolated than ever before; its leaders are faced with crippling sanctions, and as long as they shirk their responsibilities, this press will not relent. Let there be no doubt: America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal. So much for not flinching... Advertisement Every Time This Ohio Fracking Well Causes An Earthquake...   These 3 stocks rally. — Click Here —  We may only give the president's hard-lined words a passing thought, especially considering our oil imports from Saudi Arabia have fallen by about 30% over the last four years — and continue to decline. Some countries can't say the same... Chinese Woes and Canadian Cheers Between Saudi Arabia and Iran, almost two million barrels per day are flowing into China. As the second-largest crude buyer in the world (yes, Uncle Sam still holds on tightly to that crown), they can't be too happy with U.S. foreign policy at the moment. Then again, we're not expecting China to sit idle while a third world war looms. And we have a good idea where they're looking to secure that energy. A North American Energy Comeback Make no mistake about it: Canada and the U.S. are flush with natural gas. Now, that's not to say consumption has tapered off. Rather, we're consuming more of the stuff than ever before: And as Nick Hodge explained yesterday, that demand is going nowhere but up from here on out. But even when our natural gas supply glut eases over the next few years (a situation I'll delve into deeper next week), there will still be a certain degree of shipping it across the Pacific — especially with prices this low here at home: For investors, some charts can get even uglier: It wouldn't surprise me if Obama had a stake in UNG. Despite all the bullish rhetoric in his speech, he got one part dead wrong. Obama's Slipup Oddly enough, it wasn't just Obama's 'No Options Off the Table' approach to dealing with Iran that caught me off guard. I practically fell out of my chair after the president said, “Our experience with shale gas shows us that the payoffs on these public investments don't always come right away.” It was easy to see how he had missed the mark with that statement. Had he followed my Energy and Capital readers and me in 2010, he could have nearly doubled his investment on burgeoning shale plays like Range Resources (NYSE: RRC): Believe me, that's not an anomaly for us. The increase of M&A deals steamrolling through North America has given investors a sudden flurry of profits. Advertisement Mining Will Never Be the Same Nobody ever thought these rare earths and precious metals would see the light of day. But that's about to change, thanks to one tiny explorer's game-changing technology. In fact, it's already made select investors 500% richer. And it could make you 744xs your money. Get the whole story right here.  One of the best recent examples of this was last summer when BHP shelled out $12.1 billion in cash for Petrohawk Energy. That same day, shale gas investors pocketed a 61% premium on their Petrohawk shares. In 2008, we saw the same situation unfold as ExxonMobil bought out XTO Energy, a strong natural gas player in the U.S. Exxon's entrance into the shale industry — one that came with a $41 billion price tag. Although Obama didn't get the memo on how profitable these companies can be, we can certainly understand why he was excited, can't we? After all, our domestic gas production is on the verge of exceeding our consumption, with billions of dollars in future LNG exports all but guaranteed. And the EIA is optimistic that our crude output will reach 6.7 million barrels per day by 2020. You see, there's a reason this surge in M&A deals will continue over the next few years... Fact is, many of the large oil and gas companies are having a tough time keeping their own production afloat — and they're willing to spend billions to do it. ConocoPhillips, for example, just announced a 17% increase in year-over-year revenue, yet production declined by almost 8% in their fourth-quarter production. As for the payoffs for public investments, Mr. Obama, the future of our U.S. oil and gas production is ripe for the picking. Here are three of those shale opportunities still trading for under $10. Until next time, Keith Kohl @KeithKohl1 on Twitter A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta tar sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.   Related Articles U.S. to Be Natural Gas Exporter Montana's Second Oil Boom Begins Solar Competes with Natural Gas Oil and Gas Service Stocks From the Archives... Obama's Clean Energy Promise 2012-01-25 - Brianna Panzica Why Montana Oil Profits Won't Leave Investors Out in the Cold 2012-01-24 - Keith Kohl The Hard Truth about Solar 2012-01-23 - Jeff Siegel Another Acquisition in the Energy Market 2012-01-23 - Brianna Panzica Energy and Capital's Weekend Edition 2012-01-21 - Nick Hodge

This email was sent to ignoble.experiment@arconati.us . You can manage your subscription and get our privacy policy here. Energy and Capital, Copyright © 2012, Angel Publishing LLC, 1012 Morton St, Baltimore, MD 21201. All rights reserved. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. Energy and Capital does not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question. Unauthorized reproduction of this newsletter or its contents by Xerography, facsimile, or any other means is illegal and punishable by law. Please note: It is not our intention to send email to anyone who doesn't want it. If you're not sure why you're getting this e-letter, or no longer wish to receive it, get more info here, including our privacy policy and information on how to manage your subscription.