Join        Login             Stock Quote

How to Ride the Trend of the World’S Next Top Oil Producer

 November 23, 2012 12:24 PM

Last week the International Energy Agency (IEA) released its World Energy Outlook 2012. This annual report provides a long-term view of the global energy market. And it's used by policymakers and energy officials when crafting energy policy for the next year, as well as the coming decades.

In reviewing the annual outlook, some expected trends were noted. Specifically, energy demand should rise one-third by 2035. And 60 percent of that demand will come from China, India, and the Middle East. That wasn't surprising if you have been watching the energy markets over past few years.

There were, however, some big surprises …

The first was that the United States will overtake Saudi Arabia as the largest global oil producer by 2020. And the second was that natural gas growth is critical to that expansion.

[Related -Cheniere Energy (CQP) Signs LNG Agreement With TOTAL (TOT)]

Under the various scenarios in the IEA's report, global demand for natural gas grows in all of them … the only commodity to do so! And as expected, Asia, India, and the Middle East lead that demand.

Additionally, North America is expected to become a new exporter of natural gas over the coming decades, as natural gas production grows from the increase of shale and other non-conventional natural gas sources.

The World Energy Outlook 2012 is an extremely long-term view. However, from an investment standpoint it can give you important insight into the major trends affecting the energy industry, and the potential opportunities within those trends.

The Sector to Benefit Most

[Related -Insider Weekends – November 23, 2012]

Based on the IEA's outlook, the export and transportation of liquid natural gas (LNG) is seen as the preeminent growth sector in the energy industry.

As the U.S. begins to massively export natural gas, and demand continues to rise, companies that gather and transport natural gas, whether by pipeline or by tankers, will stand to benefit.

One of the companies best situated for growth in LNG transportation is Cheniere Energy Partners (CQP), which I own in the Million-Dollar Contrarian Portfolio.

Although there is no "pure play" LNG exchange traded funds in the market, you can have more general exposure in the Energy Select Sector SPDR (XLE).

This ETF contains some of the largest energy companies in the world, including those who are investing heavily in LNG like Chevron and Conoco-Phillips.

While it's obviously a long-term view, the IEA's World Energy Outlook 2012 report shows the energy markets' clear direction over the coming years. Therefore, you might consider allocating a portion of your portfolio into that sector to take advantage of the growth over the coming years as these trends materialize.

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article image3 Deep Value Stocks That Could Mount A Turnaround

Although the market action was a bit choppy in the first quarter of 2015, one fact is inescapable: the read on...

article imageFrenzied Speculative Activity In China's Equity Markets

It's time to take another look at the recent developments in China's equity markets as major indices hover read on...

article imageDeflation Fears Are Over-Inflated

The Bank for International Settlements released a study that is a breath of fresh air on read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.