Big Oil, Big Enemy
How many times have you heard this about the soaring cost of energy lately? “It’s all Big Oil’s fault.” On Monday, MarketWatch’s Peter Brimelow talked about the investment newsletter Outstanding Investments, which is currently the fourth-best performing letter over the past 12 months according to the Hulbert Financial Digest (up 45.06%) and which also boasts a 40.58% annualized gain over the past five years. Brimelow wrote about what OI editor Byron King had to say on the energy crisis in the current hotline from March 19:
King’s long-term reasoning is simple: supply and demand. Which, he argues, Americans are being misinformed about: “One of the biggest hurdles to the U.S. getting energy right is that the mainstream media infotainment circus has not prepared people… the mainstream media (MSM)— and a lot of U.S. politicians— corporately hate Big Oil so much that they won’t inform viewers and readers how little control the name-brand players have anymore.
King’s right— about how hated Big Oil is. A quick glance at some of the energy headlines over the last few days reveals:
• “We Need a New Bargain With Big Oil”
• “Skip the middle man and send rebate check to Big Oil”
• “Obamanomics: Target Big Oil, Too”
And according to legendary commodities investor Jim Rogers, he’s also right about the supply-demand story. On March 6, the chairman of Rogers Holdings told Reuters:
People have been telling me for five years that oil prices are going down. Every time I ask them where the supply is coming from. So far, nobody has been able to tell me. Please tell me where the new oil is because I want to invest in it.
On March 18, Rogers, while hosting CNBC World, told viewers:
I have no idea if there’s peak oil or not. But I do know that nobody’s discovered a gigantic elephant oil field in over 40 years. Unless somebody discovers a lot of oil very quickly and in very accessible areas, the surprise is going to be how high it stays and how high it goes. All the oil fields in the world are depleting.
King is on the same page as Rogers. Brimelow wrote:
“The MSM could help the situation if they emphasized that we live in an era of less oil, higher prices and a lot more competition for the same old stuff. They could point out to viewers and readers that the developing world is… um… developing. And we in the U.S. are not. We are just living off the past, drinking from wells we did not dig and running down the energy inheritance.”
Sources:
“Calmly contemplating a correction”
Peter Brimelow
MarketWatch, March 24, 2008
“EXCLUSIVE-Rogers says investors bet on commodity shortages”
Pratima Desai
Reuters, March 5, 2008
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