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This Oil Data Will Shock the World

By Matt Badiali, editor, S&A Resource Report
Wednesday, August 8, 2012

You wouldn't hear about it in the mainstream media, but the U.S. just increased its oil reserves by 3 billion barrels... overnight.
 
On August 1, the U.S. Energy Information Administration (EIA) published the official oil reserves for the U.S. It showed the largest-ever annual increase since it began publishing the data in 1977. That 3 billion-barrel increase beat the next-largest jump by more than 60%.  
 
And this is just the beginning... 
 
Since U.S. reserves bottomed in 2008, they're up 22.8%... But here's the thing: We're only looking at 2010 data.  
 
 
The government takes about 18 months before it signs off on "official" reserve data. In the meantime, this trend has accelerated. Let me explain... 
 
We can attribute a large part of the 2008-2010 increase to massive growth in the Bakken Shale. The Bakken Shale is an oil-soaked package of rocks that lies beneath 90 million acres of North Dakota, Montana, Saskatchewan, and Manitoba, Canada. It contains over 400 billion barrels of oil.
 
The oil is trapped in rocks that hold on to it tightly, unlike the traditional oil reservoirs. The industry struggled for decades trying to get the oil out. But as Growth Stock Wire readers know, new technologies have "unlocked" that oil, allowing it to be counted as part of the country's official reserves.  
 
As recently as 2008, official reserve data for the Bakken showed just 3.8 billion barrels. According to industry sources today, we will probably get 24 billion barrels out. (That's nearly equal to official 2010 reserves for the whole country.) 
 
We will not get the official 2011 numbers until next year... And this year's will take another 18 months.  
 
But I promise you, those numbers are going to shock the world.
 
All this "new" oil will correspond with massive increases in production. As I showed you last week, we're already seeing that.  
 
That has me cautious on any investment that depends on a rising oil price. I'm more bullish on the small-cap stocks that are finding and drilling the next major sources of oil. I'll tell you more about what I see there in a future essay.
 
Good investing, 
 
Matt Badiali




Further Reading:

Thanks to radical advances in drilling technologies, we're unlocking vast new sources of oil right here in the U.S. They're just starting to be drilled… And production is increasing at an incredible rate. So if you think oil production peaked decades ago, "you'd better update your thinking," Matt writes. Get the details here: Peak Oil Investors Beware: U.S. Production Is Soaring.

In The Daily Crux
Market Notes
Great sleep-at-night play Royal Gold surges 34% in three months... sitting just a few percent off a new all-time high.
 
Big semiconductor fund SMH breaks out to a three-month high.
 
The latest sign of a real estate recovery... Brookfield Asset Management surges to a three-year high.
 
Biotech sector funds XBI and IBB are up nearly 50% over the past 12 months.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1401.35 +0.5% +16.8%
Oil (USO) 34.91 +1.4% +2.8%
Gold (GLD) 156.28 0.0% -3.4%
Silver (SLV) 27.27 +0.6% -26.9%
U.S. Dollar 82.29 +0.0% +9.3%
Euro 1.24 0.0% -13.2%
Volatility (^VIX) 15.99 +0.3% -50.0%
Gold Stocks (^HUI) 423.41 +1.4% -19.7%
10-Year Yield 1.63 +4.5% -36.3%

World ETFs
Symbol Price
Change
52-Wk
USA (SPY) 140.32 +0.5% +19.3%
S. Africa (EZA) 67.48 +0.0% +7.6%
Singapore (EWS) 13.30 -0.3% +4.0%
Lat.America (ILF) 42.77 -0.1% -1.4%
S. Korea (EWY) 56.63 +0.6% -2.2%
Canada (EWC) 26.94 +1.8% -3.1%
Taiwan (EWT) 12.44 +0.1% -5.1%
Japan (EWJ) 9.22 +1.2% -5.7%
China (FXI) 35.19 +0.6% -6.7%
Israel (ISL) 11.94 -0.3% -16.0%
India (IFN) 21.17 +0.8% -20.7%
Russia (TRF) 14.56 +2.2% -24.4%

Sector ETFs
Symbol Price
Change
52-Wk
Retail (PMR) 24.90 +1.1% +29.7%
Construction (PKB) 14.20 +1.4% +29.3%
Consumer Svcs (IYC) 83.09 +0.6% +27.2%
Real Estate (IYR) 64.92 -1.0% +25.9%
Big Tech (QQQQ) 66.65 +0.8% +25.0%
Health Care (IYH) 80.49 -0.1% +24.9%
Biotech (PBE) 22.79 +0.4% +22.2%
Media (PBS) 15.62 +0.6% +21.0%
Utilities (XLU) 37.38 -1.0% +20.9%
Software (PSJ) 26.77 +1.0% +19.0%
Industrials (IYJ) 69.55 +1.0% +18.4%
Water (PHO) 19.03 +0.9% +15.3%
Financials (IYF) 56.16 +0.4% +15.1%
Telecom (IYZ) 23.73 -0.6% +13.5%
Defense (PPA) 19.35 +1.2% +13.2%
Semis (PSI) 15.15 +1.2% +12.7%
Insurance (PIC) 16.13 -0.3% +12.1%
Transportation (IYT) 90.87 +0.1% +9.1%
Oil Service (OIH) 40.62 +1.3% +0.0%
Big Pharma (PPH) 39.70 -0.2% +0.0%
Basic Mat (IYM) 65.83 +1.2% -1.0%
Nanotech (PXN) 6.22 +0.2% -15.4%
Alt. Energy (PBW) 4.16 +1.7% -39.1%

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