 | | Monday, August 8th, 2005 Baltimore, MD
Jackson, WY
Missoula, MT | Oil Hits $64 |  - Oil hits $64 a barrel... Next stop $150!
- Crude awakening
| 
"We've just got a continuation of the uptrend here and there's no sign that it will be stopping anytime soon."
-- Tom Bentz Oil broker of New York-based BNP Paribas Commodity Futures |
Dear Wealth Daily reader:
Another day, another historical price for oil.
It's beginning to dawn on people that Mike's "greatest investment event of our lifetime" thesis is not only true... but is unfolding before our very eyes.
As you read this... - Oil is at record highs...
- Unleaded gas is at record highs...
- Natural gas is at 52-wk record highs...
Mike's been calling for oil to hit $65 a barrel by the end of the summer. Today, oil hit an intraday of $64 a barrel.
He's calling for $71 by the end of the year... and then a steady climb to $150 a barrel.
An Historic Meeting It was 3 weeks ago that the Baltimore chapter of Wealth Daily headed to Canada to spend 3 days of sun and fun, fishing and fine dining at the Lake at the Woods, Canada.
 We were met there by Mike, the Phantom Trader and John, a friend of Mike and a person we would soon find out was very important.
The trip was a sort of "meet and greet" for the new staff. But it was also a tutorial in energy history and mining.
Heck, even I came away with new information. As Mike and I sat at one of the lake's many islands waiting for our shore lunch to be cooked, Mike pointed out quartz veins near the water's edge. He told me, "where there's a quartz vein, you'll probably find gold."
Thanks for the advice.
Of course, even slamming the fish that day, some 50 walleye within 2 hours, Mike's mind wasn't too far from the incredible bull market we're facing.
The entire team sat around listening to Mike talk about natural resources, peak oil, coalbed methane and the incredible opportunity Canada holds in its oil sands. Everybody listened, that is, except for John. It turns out John didn't need to listen to Mike. He's heard it a hundreds times before.
You see, little did we know that one of Wealth Daily's guests was none other than the legendary "John", the investor who made $50 million off of Mike's recommendations back in the mid-1990s.
It was only later on that trip that I found out the amount of money John made was more like $70 million, not $50 million.
A trade like that is life-altering.
Later that evening, while the WD team was feasting on lobster and the local wine, Mike made a statement that opened up our eyes and had many of us scraping up extra dough to put into our trading accounts. With a comment that had all of the subtlety of a howitzer, Mike announced that:
"...if the commodity bull market unfolds like I think it will, investors like John will be a dime a dozen. However, you have to be situated in the right stocks in the right industry at the right time.
It might not be $70 million that our followers make... but it'll be in the multiple millions."
That's not an overstatement. In the 3 weeks since our Canadian trip, the price of oil has increased $5 per barrel.
As a result, the price of Mike's favorite oil sands stock has doubled since mid-June. That's because with oil rising $5 per barrel, the company's oil property has increased in value by $4.8 billion.
In fact, every time oil rises 10� per barrel, the value of this company's oil increases $96 million. That's not a bad way to accumulate some serious wealth.
Over the weekend Mike forward me an article that seemed to validate everything he's been telling us: That oil is headed higher. and companies sitting on significant reserves are about to explode in value.
I'll let Mike take it from here.
-Brian Hicks
Advertisement BUY! BUY! BUY! The Great Canadian Auction of 2005! After the recent $1.1 billion acquisition of oil sands upstart Deer Creek Energy by France's Total SA and Kinder Morgan's $5.6 billion purchase of oil pipeline company Terasen...
 The Globe and Mail newspaper reports... - "Oil sands producers seen ripe for takeover."
And today TheDeal.com says... - "Canada's oil sands may spark frenzy..."
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Worth $10.8 TRILLION... And Going Higher The headline for the article says it all:
"Big Oil set to pounce in Alberta: expert
Oil sands producers seen ripe for takeover" -Globe and Mail, August 6.
If you don't have a position in Canadian oil sands, read this passage:
"Donald Coxe, chairman and chief strategist with Chicago-based Harris Investment Management Inc. and BMO's global portfolio strategist, said yesterday that he believes the SEC will loosen its rules -- freeing major oil companies to aggressively pursue acquisitions in the oil sands.
'I believe there will be a disappearance of the publicly traded companies, once the SEC comes out with its rulings,' he said in a conference call yesterday. 'I believe Big Oil is going to want to go in and buy these companies.'
He said companies with existing oil sands operations are certain to be snapped up, even though their market values have grown as the price of crude has soared and interest in the sector has intensified. 'The wealth of the oil companies have also grown by leaps and bounds,' Mr. Coxe noted."
What the article doesn't say, is that Canadian oil sands, which have been known about for decades, is now enjoying its day in the sun. and will do so for quite some time.
You see, many oil experts believe that Canada's oil sands will become the 3rd largest oil producing region in the world, behind Saudi Arabia and Russia.
I think these experts have it wrong.
I think Canada is on the verge of becoming the most important oil producing nation in the world. And I think Alberta - which holds at least 175 billion barrels of oil - is about to become the hottest - most sought after oil patch play on the planet.
And that makes any oil company with significant reserves in the oil sands region solid gold. and an almost guarantee to make investors money.
Now, in my energy advisory service, the Pure Energy Report, we own 2 small oil sands stocks. One now trades for $2.40. and the other trades for $4.60 a share. Both are up big in the past month... and are up 167% and 112% in the PE portfolio.
Both of these stocks were recommended in March of this year. So you can see how explosive and quick the gains can occur.
I'll tell you about these stocks in a minute, but I want to take a moment to explain why Canada is on its way to oil superstar status.
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Filthy Rich Oil Canucks First, let's talk about Saudi Arabia. As Matthew Simmons points out in his book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, the Saudis have essentially cooked the books regarding their oil reserves.
In other words, the Saudis don't have the oil they say they have. Simmons believes they have a lot less.
By the way, if you haven't listened to my July 14th interview with Simmons, go here to listen to it: http://www.wealthdaily.net/symposium.php
Second, oil experts - namely the "realists" which I consider myself a member - are beginning to argue that world oil production may have already peaked. And specifically, peaked in July 1998, when oil hit a low below $12 a barrel.
Ever since then, oil prices have steadily risen. Take a look:
Moreover, advocates of peak oil see other several pieces of evidence which suggest higher oil prices are here to stay: - Total world oil production reached 68 million barrels per day in 2003, according to a count by the Oil and Gas Journal. That's not much above the 66.7 million barrels per day.
- Production has peaked for more than 50 oil-producing nations, including the US (1970) and Britain (1999). China, second to the US in the consumption of oil, was a net exporter of oil until five years ago.
- The Department of Energy predicts world demand will reach 119 million b.p.d. in 2025, with huge increases in China, India, and other developing nations.
- In 2002, the world used four times as much oil as was newly found.
- The rate of discovery of worldwide oil reserves, after declining for 40 years, has slowed to a trickle. In 2000, there were 16 large discoveries of oil, eight in 2001, three in 2002, and none last year, notes James Meyer, director of the Oil Depletion Analysis Centre in London.
- All the giant fields, such as those in the Middle East, have already been discovered, some experts say. These giants are relatively easy to find. The last major oil field, Cantarell, off Mexico's shore, was discovered in 1976.
With decreasing reserves meeting exploding demand, this is setting the world up for what I'm calling the greatest investment event of a lifetime. You have, staring at us, a moment in history when savvy investors can make a killing buying the most valuable, sought-after commodity next to food and water. And that's oil.
Owning a piece of this event it is like owning a winning lottery ticket that pays out every single day for the next 15 years.
There are 2 ways to make a fortune from this event. First, you can buy stock in companies that have significant oil reserves. I prefer buying small companies with massive upside potential.
Right now, there are a handful of companies in the oil sands patch that meet that description. My Pure Energy readers are in 2 of those stocks.
But, here's the important point: As the underlying asset (oil) continues to increase in price, the value of the respective company will also increase.
That's why, for instance, the 2 oil sands stocks we own have literally exploded in value the past 6 months.
Second, if you're a purist, you can own the actual asset by buying a futures contract. This way, you don't have to worry about 10-K's or 10-Q's, insider buying or selling, or whatever.
Buy the actual oil contract, and let the market ride.
In any event, I offer services dedicated to each.
If you're looking for small energy stocks with massive upside potential, I urge you to read my oil sands report: PE... My New Oil Sands GIANT
If you're looking for quick trades in the energy futures market, take a moment and read this exclusive report regarding my energy futures trading service: http://www.dailyenergyalert.com/dea.php
Either way, you're going to make money.
-Mike Schaefer
Editor, Secret Stock Files, Pure Energy Report, and the Daily Energy Alert
Advertisement "Brilliant service. Stop selling subscriptions." That's what one member of the Daily Energy Alert recently said.
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Crude Awakening I have a morning routine. When I walk into the office I grab a cup of joe, turn on my PC, check my email and then check oil prices.
This morning I was mid-sip when I saw the overnight prices. I choked. Hot coffee came shooting out through my nose. Through my watering eyes I saw it. $62.90!
What a crude awakening! A nice way to start the week if you're long oil, which we are.
It seems that the bounce came on news that the U.S. embassy in Saudi Arabia has closed due to security threats.
Embassy officials have decided to close the building for at least two days.
An embassy press officer said that the closing is in response to intelligence suggesting an attack was imminent.
The embassy also reiterated advice to American citizens to be especially vigilant and to take appropriate steps to increase their security.
A statement posted Saturday on the embassy's Web site warned of "ongoing security concerns in the region, including for seaborne vessels traveling in the southern Red Sea."
While no specific details were provided, today marks the 7-year anniversary of the 1998 embassy bombings in East Africa that claimed the lives of over 250 Kenyans, 12 U.S. citizens, and injured more than 4,000 innocent people.
Over the weekend I listened to Mike Schaffer's interview with Matthew Simmons again and it shocks me each time I hear Mike and Matthew talk of oil being cheap.
You'd be hard pressed to convince anyone standing at a gas pump that oil is cheap.
While oil is 40 percent higher than a year ago though crude prices would have to surpass $90 to reach the inflation-adjusted high set in 1980. But many energy pundits believe that this is right around the corner.
Late last Friday OPEC announced that it would increase its output by 300,000 bpd. But even that wasn't enough to stifle today's oil price.
- Luke Burgess
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