Special Report: Can Petro Technologies Save Oil?
Oil grabbed most of the headlines this week, and for good reason.
Prices went negative on Monday — hitting a low of minus $39.44 per barrel — before rebounding into the midteens.
In over a 100 years of trading, we’ve never seen subzero oil prices.
It truly was a once-in-a-lifetime occurrence.
The topic is relevant here at Technology Profits Daily because oil, like every American industry in the 2020s, is being deeply impacted by technology.
Artificial intelligence (AI), machine learning and predictive analytics hold incredible appeal to oil barons, as they’re beginning to enhance virtually every facet of the operation — from exploration… to drilling… to refining.
I’m tracking one technology that uses machine learning to predict when rigging equipment is about to fail… another that uses AI to determine the perfect spot to drill… and yet another that uses predictive analytics to manage electricity loads during storms and extreme weather events.
Put simply, the oil industry is ripe with innovation.
Today’s special report seeks to answer two simple questions…
Can petro-technologies reverse oil’s recent misfortunes?… and if so, should we be investing in petro-tech stocks for outsized gains?
As the team’s chief Futurist, my job is to “see” how the oil crisis will play out over the next few weeks — so we can invest accordingly. And the first thing you should know is this…
Petro-Technologies Are Racing Against Time
It’s been nearly a week since oil’s epic plunge into No man’s land.
Historically speaking, after the floor drops from under a commodity — whether it’s coffee, nickel, soybeans or oil — the next few weeks are spent finding a new equilibrium price.
Short-term traders are very active during this period, as wild price swings present opportunity — especially in the options and futures markets.
When the dust finally clears, into the late summer and early fall, oil prices will have settled at around $18 per barrel.
Such a prophecy is foreboding…
As it stands, U.S. producers must fetch $40–50 per barrel just to break even.
So by losing $20–30 at the wellhead on every barrel of oil, not only will producers plunge deep into the red for months on end…
But the likelihood that hundreds of junior drillers shutter operations is profoundly real.
The timing here is uncanny.
See, petro-technologies had been slowly coming online over the last few months, and they were supposed to return oil to its glory days.
In fact, in early January, Vox reported, “Just when things look bleakest for black gold, new technology swoops in to keep the industry afloat.”
“Bleakest,” you say?
When Vox’s article published, oil was trading for $61.
So you can imagine the devastation unleashed by prices in the teens.
When you combine low prices with other forces negatively impacting the oil industry — environmental concerns and climate change, oil hatred among progressive policymakers, price manipulation by oil cartels and the fact that storage capacity is maxed out…
These forces will mute the upside of petro-technologies.
John Maynard Keynes’ famous quote is well applied here…
“The market can stay irrational longer than you can stay solvent.”
Bottom line, our investment dollars are better served elsewhere.
Onward and upward,