Dear Wealth Daily Reader,
Just after I uncorked a bottle of Cabernet Friday evening, I read a story that I’ve wanted to tell you about all weekend.
Petroleum Intelligence Weekly (PIW), considered by many as the “Bible” of the international oil and gas industry, is claiming that Kuwait’s official estimate on the country’s remaining oil reserves has been grossly overstated.
In fact, if the report turns out to be true, Kuwait will make the Enron debacle look like an evening of BINGO at the local retirement home.
PIW argues that Kuwait’s true reserves are actually less than half the amount of the level of the official estimate. Half!
I’m going to tell you more about this incredible story in just a second.
But before I do, let’s talk about Canadian oil sands. Oil Sands on 60 Minutes
If you’re a regular Wealth Daily reader, I don’t have to convince you of what a mind-blowing investment opportunity Canada’s oil sands present smart investors.
We’ve been telling you about the oil sands since day 1. In fact, Mike Schaefer has been telling people about the sands since the 90s.
Last night 60 Minutes featured a story on Alberta’s Oil Sands. It was a decent story that I think is worth a watch. You can read the full transcript or see part of the feature by going to 60 Minutes website. The title of the feature is The Oil Sands of Alberta.
Now the story didn’t feature anything we haven’t already told you. But the importance of oil sands being on 60 Minutes is phenomenal.
Over 10 million people tune in to 60 Minutes each week. That’s 10 million potential investors.
Not surprisingly, all of our oil sands stocks were up this morning. And as the oil sands become more and more mainstream, you can certainly expect bigger gains from our oil sands play.
Ok now onto the big story of the day. Kuwaiti Oil Reserves Only Half Official Estimate?
Kuwait’s remaining oil reserves are officially stated at around 99 billion barrels. That’s close to 10% of the global total.
But according Petroleum Intelligence Weekly, these numbers are way off.
The newsletter claims that they have seen internal documents from state-run Kuwait Petroleum Corp. that say the true reserves are barely half the level of the official estimate.
PIW reported on Friday that according to data circulated in Kuwait Oil Co, the upstream arm of state Kuwait Petroleum Corp, Kuwait’s remaining proven and non-proven oil reserves are only about 48 billion barrels.
And what’s more is that only 24 of the 48 billion barrels are so far only proven. The other 24 billion barrels of reserves are non-proven!
If what Petroleum Intelligence Weekly is claiming is true, then we’ve lost 5% of the world’s global oil reserves without even knowing it.
This will have a critical impact on the market.
As always, Wealth Daily is long oil. Oil Holds Above $68
Forward month crude oil touched a four and a half month high on Friday on supply worries associated with the Iranian nuclear situation.
March crude briefly flirted with the $70, topping off at $69.20 per barrel before pulling back to just over $68 this afternoon. Take a look:
Labor conflicts in Nigeria and new threats from al-Qaeda also helped to push the price of oil higher.
Royal Dutch Shell has verified the death of a second catering contractor who was killed in an attack by armed militants on an oil platform in southern Nigeria last week. The latest attack raises the death toll to 14.
The recent attacks on personnel and the rupture of a major Shell pipeline in the region, has forced the oil goliath to evacuate more than 300 workers from four installations that were considered especially susceptible to attacks.
As a result Shell was forced to cut production by 221,000 barrels a day.
Adding to the oil fright-fest, an audiotape was released on Thursday featuring Osama bin Laden warning that his minions are preparing new attacks in the United States.
But the big concern on the energy market right now is Iran.
The rouge country continues to refuse halting its uranium enrichment program, which it claims is for energy.
I don’t see an end to this conflict anytime soon. In the meantime oil prices will continue rising.
– Luke Burgess