How about seeing USA as Oil Exporting Country?

December 20, 15

How about seeing USA as Oil Exporting Country?

Greetings from Hitesh! Thanks a ton for your responses to my last post on Investment formula. Most have said that they could see the thin line between buying at good prices and good market. They also understood the mistake of not adding to their winning horses. Thanks for your confessions. It is good for you. I hope you will not make those mistakes again. Now, let me deal with USA as an Oil Exporting Country. Let me deal with Reuters NEWS.

Timothy Gadner from Reuters reported yesterday that “Congress kills U.S. oil export ban, boosts solar, wind power”

The U.S. Congress voted on Friday to repeal the 40-year-old ban on exporting U.S. crude oil in an energy policy shift sought by Republicans as part of a bipartisan deal that also provided unprecedented tax incentives for wind and solar power.

The Senate, on a 65-33 vote, approved lifting the ban and providing five-year extensions of tax breaks to boost renewable energy development as part of a $1.8 trillion government spending and tax relief bill that President Barack Obama quickly signed into law.

The House of Representatives passed legislation containing the energy provisions earlier in the day by a 316-113 tally.

The energy deal was hammered out in secret talks among congressional leaders over two weeks.

Senators Lisa Murkowski, a Alaska Republican, and Democrats Heidi Heitkamp of North Dakota and Martin Heinrich of New Mexico had worked for more than a year to get the deal.

Democrats who backed the deal asserted that its provisions encouraging renewable energy were important for combating global climate change.

"This is the biggest deal for addressing climate change that we are going to see," Heinrich said in an interview.

Heinrich said Democrats may not have been able to get a better deal even if they controlled both chambers of Congress, now led by Republicans. Many Republicans have opposed Democratic proposals to address climate change.

Congress, concerned about U.S. dependence on imported oil, imposed the crude oil export ban after the Arab oil embargo of the early 1970s that sent gasoline prices soaring and contributed to runaway inflation. Arab members of the Organization of the Petroleum Exporting Countries (OPEC) imposed the embargo following the U.S. decision to re-supply the Israeli military during the 1973 Arab-Israeli war.

Drillers have said lifting the ban would increase U.S. oil security and give Washington's allies in Europe and Asia an alternative source of crude beyond OPEC and Russia. The bill could benefit oil companies including Exxon Mobil Corp, ConocoPhillips and Chevron.

OIL BOOM

Drillers said continuing the ban would choke a boom in shale oil production since 2008 particularly in North Dakota and Texas that has pushed domestic oil prices down from more than $100 a barrel to below $40.

Lifting the ban was "particularly important at a time when our industry is experiencing a period of extreme volatility and uncertainty," Ryan Lance, chairman and CEO of ConocoPhillips, said in a statement.

Pelosi on Friday said Democrats walked away with a victory, in the trade of oil exports for environmental goals.

"Now that we have leveled the playing field, the United States finally has an opportunity to compete and realize our nation's full potential as a global energy superpower,” said George Baker, head of Producers for American Crude Oil Exports, a group that formed last year to press lawmakers to open the trade.

So, it is final that US will be exporting OIL!!

HOW DO WE READ THE USA GAME PLAN?

1.   Middle East countries are busy fighting WAR. The war will enter into its final phase post FEBRUARY 2016, according to us. (No NEED to say that USA is behind these fights).

2.   Any major DAMAGE (which will surely happen due to WAR) to OIL producing capacity in OPEC will lead to increase in OIL prices in coming year or two.

3.   USA will make a killing in selling WAR MATERIAL to these countries.

4.   USA Crude cost is around USD 36 a Barrel. So, they are still making a profit at USD 40. They can afford to sell at even USD 30 or USD 25 for a short term.

5.   With the Increase in RATE – USD will become COSTLY compared to other currencies – so the effective earning for US oil companies will be more!! This will help them to make up for the lower oil prices in short term.

What DOES is mean for Indian Investors?

We see CRUDE is about to bottom out. Now crude is trading around Rs.2400 on MCX. With the fall in international prices – it may go down further for SHORT PERIOD of time.

If you are a commodity player and you have a patience to hold CRUDE for 6 months and more – I suggest you go on adding in SMALL LOTS at every decline.

CRUDE will surely FLY. Remember me in DEC., 2016!!

If you are international TRADER – you can buy in USD and forget. You will bless me. CRUDE is about to TAKE A “U” TURN!!

What NEXT?

We always tell you well ahead of the market. This time we are giving you a bold call to buy CRUDE for a VIEW of 6 months and more. If you do not have patience – do not touch this. Whether you buy or not – crude will move up, that is for sure.

If you want to make tons of money with 100% peace of mind – do contact us.

Wish You ALL A VERY HAPPY SUNDAY.

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Live With Passion…Invest With Passion.

Hitesh Parikh.