U.S. oil independence is picking up steam. In December, the country
lost its position as the world’s largest importer of oil, with shale
production climbing faster than expected. Net imports fell below 6
million barrels per day, domestic production increased more than 1
million barrels per day and demand declined by about 700,000 barrels per
day.
In the east, it’s a different picture, as Chinese crude imports reach
record volumes. While the U.S. may nudge its way to the top position in
the short term, it’s likely that China will “officially overtake the
U.S. as the world’s biggest oil importer” in 2013, according to Citi
Research.
Despite America’s energy renaissance, the price of a gallon of gas
remains hinged on growing global demand and seasonal pricing trends.
That’s why the recent bump in gas prices isn’t a cause for alarm,
especially for resource investors.
Business Insider shared this chart from Deutsche Bank, showing retail
gasoline price trends normalized to December 2012 prices. Going back 15
years, the price for a gallon of gas has historically risen during the
first half of the year, and generally declined in the last half of each
year. While this year’s increase of $0.53 per gallon seems alarming, the
rise is a non-event when you compare it to the seasonality of oil and
oil products.
Last January, we
posted a seasonal chart showing a similar pattern, with returns of the S&P 500 Energy Index rising in February, March, April and May.
Themes to Capitalize On
This time every year, the futures market builds in the rising price of
oil with the assumption that refineries are getting ready for the summer
driving season. Annual maintenance is scheduled, causing inventories to
build. Also, the summer fuel is a different blend that is more
expensive to produce.
While there’s not much a consumer can do to lower the price of gas at
the corner station, investors can act today on the more significant
emerging energy trends. Here are three ways
Global Resources Fund (PSPFX) portfolio managers, Brian Hicks and Evan Smith, plan to seize the potential opportunities:
- Domestic Refiners: Strong overseas demand, a weak
U.S. dollar and a glut of oil from growing unconventional production in
North America have driven U.S. exports of gasoline and distillates to
record volumes, heralding in a new golden age in refining.
- Petrochemicals: A U.S. manufacturing renaissance
combined with inexpensive natural gas feed-stocks unlocked from prolific
North American shale plays have fueled profits of the U.S. chemical
industry.
- Midstream: With the rapid development of North
American oil and gas shale basins such as the Marcellus in Pennsylvania,
the Eagle Ford in Texas and the Bakken in North Dakota, infrastructure
constraints are being alleviated with new investment in assets to
gather, process and transport growing oil and gas volumes. We believe
certain Master Limited Partnerships (MLPs) that have the right type of
assets in the right geographic locations will allow investors to reap
the benefits of the development of shale plays in the U.S. and Canada.
You can access these trends through select petrochemical or oil &
gas MLPs, ETFs or stocks.
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Today billionaire Eric Sprott told King World News that the current
financial system will end in ruin. Sprott also stated, “It’s
unfortunate for those of us in the precious metals sector that, in
essence, we are fighting the Fed all of the time … but I have no doubt
that we will win.” This is the first in a series of interviews with
Sprott that will be released today which reveals, despite mainstream
propaganda, the reality of the increasingly desperate situation Western
central planners face. Below is what Sprott, who is Chairman of Sprott
Asset Management, had to say.
Another
round of data is driving home the fact that the country’s once-hot
housing market has shifted into lower gear. The number of homes sold in
Canada in February plummeted 15.8 per cent from the same period last
year, the Canadian Real Estate Association said on Friday.
