What Oil Traders Need to Pay Attention to Today

Key Points:

• The U.S. set a record for oil production in December, the highest ever by any country.
• Shale production continues to debunk “peak oil” predictions.
• Geopolitical tensions in the Middle East could increase oil prices.
• Also: Investors are scooping up shares of these 2 Dividend Legends.

Doug and Lee discuss the recent record-breaking oil production in the U.S., highlighting how shale continues to drive significant output. Despite concerns about weak demand from China and past predictions of peak oil, oil production remains strong. They note that while oil prices have recently dropped to around $67-$68, they could rise again, especially if geopolitical tensions in the Middle East escalate. They also touch on how traders might respond to these price fluctuations, with oil companies still profiting even at lower price points, though not as significantly as when prices were higher.

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Edited Video Transcript:

If you’re going to trade oil futures, which I know not everybody does, but here’s one of the things to consider.

The United States in December produced more oil than any country in any month in history.

Yep.

Record on the calendar and countries.

The shale, I mean, shale is the gift that keeps on giving.

Yeah, it really is.

I know that there’s a lot of conversation about a weak Chinese economy and the fact that demand there might be a little bit slow.

But the whole notion that there was going to be peak oil sometime in this decade is just it’s gone away.

It’s absurd.

And, you know, and they’ve been making that argument.

You know, when did the first peak oil arguments come out?

Nineteen eighty eight.

Something like that.

Yeah, it’s ridiculous because, you know, the demand and there’s so much so many additional products that are oil based.

It’s not just sticking it in your car.

But, yeah, it’s constantly a demand question, you know, and that demand question typically comes from as a result of what’s going in and out of China.

But, you know, I think that I think we’re going to see higher oil pricing.

And boy, if the Middle Eastern.

Yeah.

Issues get a little hotter there and really, really explode.

It could go a lot higher from this current level, which I think WTI today is, you know, sixty seven, sixty six, sixty eight dollars in that range.

And like you said, it’s down from ninety earlier this year.

Well, we can think back about three years when it topped one hundred.

Right.

People were worried about Ukraine.

You remember there was sort of that geopolitical upheaval.

Yep.

Oil spiked way, way up.

But it didn’t really stay there for long.

No, it didn’t.

And, you know, needless to say, people that trade these, you know, these benchmarks, I’m sure they were they were shorting all the contracts they could at ninety two or ninety or whatever, because, you know, the major oil companies, I think for many of them, their cost, you know, plus is forty dollars.

Forty five dollars, you know, depending on who you’re talking about.

And, you know, they still make money in the sixties, but not the kind of, you know, huge windfall money.

They make it ninety or ninety five or one hundred.