This U.S. Oil Sector Is Booming

In the decade from January 2000 through December 2010, U.S. exports of oil products like gasoline, diesel fuel, jet fuel, etc., grew by nearly 160%. The exports averaged 1.1 million barrels per day for that period.

According to the Energy Information Administration’s data, we export nearly five times that much now.

The shale boom in places like the Permian Basin of Texas spurred the growth in refined exports. The light sweet crude oil can be run through a simple refining process, put on a ship and sent abroad.

You can see the growth in the export chart below:

Our largest trading partners are our neighbors to the north and south. The table below shows the largest importers from January to August 2017:

As you can imagine, there are plenty of investment opportunities around this trend. The VanEck Vectors Oil Refiners ETF (NYSE: CRAK) is up 38% this year and climbing. Individual refiners, like Marathon Petroleum Corp. (NYSE: MPC) and Valero Energy Corp. (NYSE: VLO), are up 17% and 16% this year, respectively.

Thanks to the demand from abroad, refining is a great place to look for both investments and income. For example, Valero’s dividend increased from 50 cents per quarter in 2015 to 70 cents per quarter in 2017.

Good investing,

Matt Badiali
Editor, Real Wealth Strategist

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Comments 4

  1. Thomas Schechter December 1, 2017

    If we can export that oil, why do we import from OPEC and nonOPEC nations? Why not just use it, and don’t bother importing.

    Reply

    • ralph johnson December 11, 2017

      because…..in spite of all that “strategic reserve”…….energy independence….blah, blah, blah…..we still get to buy our gas needs with that added-value set of taxes and import fees ……….and since we are now a net producer, we allow our “strategic reserve” commodity to be sold on foreign markets @ a PROFIT…for the well-lobbied club members and their corporate sponsors….
      either way, there is a floor price for us…..and a concurrent profit guarantee for inside clobbers…..

      Reply

  2. Ron Chacey December 1, 2017

    When can we expect to see another article by JR Crooks covering several markets and using charts. His articles, particularly with charts, are the main reason that I continue to subscribe.

    Reply

  3. James December 2, 2017

    Matt whereabouts in this boom, recession, depression, recovery and growth are we at. We are in for a massive boom nonetheless then followed by a crash. The economic cycle is of prosperity, recession, depression, improvements in the economic cycle. The economy always goes in a boom, recession, depression, recovery and growth. Unless we are in a sceleroid economy. Or a stagnant economy. There will be a boom in GDP at factor costs, there will also be a boom in GDP at market prices. There will be constant growth in the solow steady state residual. There will be a boom in the golden steady state level of income. The economy always goes in a prosperity, recession, depression and improvements economic cycle. There will be a boom in GDP at factor costs, and GDP at market prices. The solow steady state residual will boom. The golden steady state residual will boom. We are in the middle of one of the biggest booms the world economy has ever seen. There will be constant growth in the solow steady state residual. There will be constant growth in the golden steady state level of income. This boom will be even bigger than the last boom. The economy always goes in a prosperity, recession, depression and improvements cycle. The economy always goes in a boom, recession, depression, recovery and growth cycle. The kondratieff wave is a 45 to 60 year cycle we might be in one of those. We might also be in a Kuznets cycle. Of international wars ramping up. The war in Syria looks really bad. If we are in a Kuznets cycle of 15 to 20 years. We might even be in a jugular cycle of 7 to 12 years. We might even be in a kitchin cycle of 7 to 12 months. The economy always goes in a prosperity, recession, depression and improvements cycle. There will be a boom in GDP at factor costs. There will be a boom in GDP at market prices. There will be constant growth in GDP and GNP. There will be constant growth in the solow steady state residual. There will also be constant growth in the cobbe Douglas production. Will alpha and beta be greater than one. Will there be capital intensive and labour intensive growth. If alpha is greater than one there will be increasing returns to scale. If beta is greater than one there will be increasing returns to scale. If alpha and beta is less than one there will be decreasing returns to scale. There will be diseconomies of scale the disadvantages of large scale production outweigh the advantages of large scale production. If there is increasing returns to scale, that means there’s is economies of scale. That means the advantages of large scale production outweigh the disadvantages of large scale production. There are economies of scale. There will be a boom though. Because the economy always goes in a boom, recession, depression, recovery and growth. The economic cycle is always one of prosperity, recession, depression, and improvements in the economic cycle. The kondratieff wave is a 45 to 60 year economic cycle of prosperity, recession, depression, and improvements in the economic cycle. Yes the Kuznets cycle is ramping up of wars but everyone knows there’s a war going on in Syria. We might be in a jugular cycle of 7 to 12 years. We might even be in a Kuznets cycle of 15 to 20 years. We might even be a kitchin 20 month cycle of prosperity, recession, depression and improvements in the economic cycle. We might be in for the biggest boom the world economy. A big boom followed by a bust. The economy always goes in a prosperity, recession, depression, and improvements cycle. There will be a bull market in the stock market. There won’t be a bear market in the stock market. A bull market is a rising stock market. A bear market is a falling stock market. I am hawkish about interest rates. I think we might see negative interest rates or we might interest rates close to zero. The commodities market, black gold, the price of Brent crude oil, will boom. The precious metals market there will be a boom in that. The market to get into is the market for inverse etfs. Leveraged etfs, unleveraged etfs, mining stock, futures and options are the market to get into. In development economics the most important coefficients are the gini coefficient, the lorenze curve, the Engel curve, the piecemeal rate, and the headcount ratio. We must decide what to get into. Either call options or put options. If its a put option, it means we are putting someone else in charge. Call options can be good too like ringing someone on the phone. Maybe there’s gonna be a gold tranche. Which means there will be a boom in the precious metals market. Mining stock is the market to get into. Kinross and IamGold are the precious metals to buy. There’s gonna be a gold tranche. Maybe even a gold rush. The precious metals market will see an avalanche is demand for the precious metals market. We will see an avalanche in demand for gold. A gold tranche. Inverse etfs are what to buy. An etf is a current basket of assets. Inverse etfs offer great value in basket of current assets markets.

    Reply