$6 Gas Prices Are Already Here

It looks a lot like 2008 out there…

Oil prices are surging. No one has a clue what’s around the corner, and speculators are being blamed for driving crude oil prices up.

Nancy Pelosi said in a press release this week:

Independent reports confirm that speculators are driving up the cost of oil, hurting consumers and potentially damaging the economic recovery.

Wall Street profiteering, not oil shortages, is the cause of the price spike. In fact, U.S. oil production is at its highest level since 2003, and millions of acres have been cleared for additional development.

We need to take strong action to protect consumers from this speculation.

Unfortunately, Republicans have chosen to protect the interests of Wall Street speculators and oil companies instead of the interests of working Americans by obstructing the agencies with the responsibility of enforcing consumer protection laws.

They have also repeatedly opposed our efforts to end billions of dollars in outdated taxpayer subsidies for oil companies enjoying record profits.

Interesting…

So I guess it has nothing to do with the Fed pumping trillions of dollars of liquidity into the market this year so that Europe can stay afloat?

And it doesn’t have anything to do with Iran?

If you haven’t heard yet, Iran suspended oil sales to France and the UK in a “screw you” move. They’re also denying the UN nuclear watchdog access to suspected nuclear facilities.

Let’s be honest, nobody is buying this whole “peaceful nuclear program” concept Iran is trying to sell.

Naval ships are filling the Strait of Hormuz — the bottleneck for a fifth of the world’s crude oil — in preparation for war. 

We could easily find ourselves battling the oil shocks of the Gulf War, the 1973-1974 oil embargo that  quadrupled oil prices, and the 1979 Iranian Revolution.

Drivers in Florida  are paying $5.89 a gallon in Lake Buena Vista and  $5.79 in Orlando — and not because of speculators, despite what Pelosi might have you believe…

The Only Certainty 

The only certainty in all of this is that domestic oil producers will protect your portfolio as things spiral out of control.  

Back in 2007, the Bakken region exploded —  running straight up on $147 oil, just as we said it would.

Take a look at Brigham Exploration.

We bought at $2 and recently sold at a buyout price of $36 on its 2008 run:

I wrote an article explaining the run-up to Wealth Daily readers — and forecasting this growth to continue for some time:

We estimate that the entire field, fully developed, in Bakken is 24 billion barrels,” Hamm, CEO of Continental Resources (NYSE: CLR) told the Wall Street Journal. That alone would easily double our proven oil reserves.

Hess CEO John Hess believes North Dakota’s Bakken Shale could triple by 2015 as the company continues to drill. Current output of 39,000 barrels of oil could reach 60,000 by 2012 — and 120,000 barrels by 2015, as it rushes to tap the oil and gas that lay underneath the United States.

And this growth will continue for quite some time…

But what’s really exciting about North Dakota is that it’s about to overtake California — and maybe even Alaska — to become one of the United States’ biggest oil producers.

This continued growth in the Bakken is creating another profit scenario just like Brigham…

Last month, the U.S. Energy Information Administration (EIA) upped its forecast of crude production in 2025 to 6.4 million barrels a day — one million barrels more than what was pumped in 2010.

And that’s after the EIA projected a Bakken peak at six million barrels in 2022.

Other analysts believe the EIA is still underestimating the numbers, saying production could actually reach 9.1 million barrels by 2015 — close to 45% above EIA estimates.

How to Play It

The current geopolitical situation is setting the stage for another promising investment opportunity.

In fact, from what Keith Kohl is telling me, the Bakken region is about to see an explosion of buyout opportunities over the next few months.

Trading under $10, these potential buyouts are still unknown by the greater investment community…

Stay Ahead of the Herd,

Ian Cooper

@IanLCooper on Twitter

Ian Cooper has been trading stocks and options for 12 years. He contributes options, stock, and energy commentary to Wealth Daily, Wealth Wire, and Options Trading Pit. He’s the Coach behind Options Trading Coach, a beginner’s guide on how to trade options. Ian teaches thousands of loyal subscribers the many ways to be profitable from options rather than simply buying stocks alone. For more about Ian, take look at his editor’s page.