Look, Another ‘Crisis’ That Won’t Hurt Energy Stocks

If the day ends in a ‘y’, you can be sure there will be another crisis to hit the energy markets.

The latest crisis is Iraq.

A bunch of Islamist militants are seeking to take over the country.

That poses a threat to Iraq’s oil supplies.

Without Iraqi oil, the world economy could grind to a halt and the oil price could go to US$200 a barrel.

Hang on a minute. It feels as though we’ve gone back in a time machine to 1999.

That was when OPEC and Middle East oil was important. But today, there are plenty of other places to get oil. This crisis is yet another scare that won’t have any impact on the world economy whatsoever…

The oil and energy story is one of our favourite subjects.

We’ve followed it closely for a number of years.

The oil and energy markets have changed a lot over the past 15 years. And yet when you read many of the news stories about the current problems in Iraq, you’d think that nothing has changed.

There’s a reason for that. It’s not the job of the mainstream press to let their readers know that things have changed. The mainstream press know that most people don’t like change.

Most people like to think that things have been, are, and always will be the same. It makes them feel comfortable. So it’s up to the mainstream press to reassure their readers that things are the same. That way their readers won’t get scared and start looking around for answers.

But things have changed…and there’s no getting away from it.

Big differences between 1999 and today

There are two major differences between the oil industry of 1999 and the oil industry of today.

The first is technology and the development of new techniques such as hydraulic fracturing (fracking).

People label a lot of new technology as revolutionary. But not all of it truly is revolutionary. It’s another one of those over-used terms.

(If you want to check out some of the most revolutionary technology on the planet, look at some of the stuff Sam Volkering writes about on a daily basis at Tech Insider.)

Fracking is a genuine revolutionary technology. It has meant oil explorers can exploit and recover oil reserves that were previously inaccessible using conventional drilling techniques.

And fracking itself only really became possible as a result of the earlier tech development of directional drilling. That was the ability for drillers to ‘steer’ the drill bit a mile or more beneath the surface.

Read the rest of this article at Money Morning