VBIN's oil stock thread.

[EricL]

Another good post from the Energy Investing board that mirrors my thoughts on OPEC production.

Quote:OPEC has been missing their output targets for the last six months with a present deficit of about 700K which is probably at least a 30 day old number.  This is the primary reason I want to stay long the energy market at this time. That situation is a major tell into an area of information that has always been hidden from the public for many years. Would you really bet on OPEC coming up with another 2.5mm bbls over the next 6 months + that missing 700K? I think it's unlikely. That combined with increasing demand and little or no CAPEX is why the admin is panicking. They know that it will get worse going into the mid terms and there is little they can do to change it, even if they actually wanted to.
 
Real information is at a premium these days and the best indicators we have today are the divergence of energy equities from WTI over the past month or so along with extreme backwardization in the futures.I remember the same WTI/equities divergence happening back in 2003/4 and it was the leading confirmation of that energy bull.
 
Oil prices are now high enough to make E&Ps very profitable but not yet high enough to create a market that will put CAPEX into new production that is sorely needed. I can't imagine a more bullish circumstance for energy investment.