The oil bulls aren't impressed by most current market chatter -- perhaps unsurprisingly, since the mild winter has been a problem for them.
Gray Cardiff wrote in the most recent issue of Sound Advice: "Energy stocks continue to prosper as short-term traders try to outsmart each other by pushing energy prices higher and then lower depending on what the weatherman might say next ... It is nothing but noise unless you expect Antarctica to turn tropical or Hawaii to freeze over permanently ... Buy on fundamentals, not transient circumstances dictated by Mother Nature."
What are these underlying fundamentals? A very powerful, not to say hair-raising, statement of them just appeared in the energy-oriented Outstanding Investments:
"The next five years may determine the United States' economic future. The world energy challenge is on, and the United States is a day late and a dollar short (actually, several dollars short). While America ambles along, other countries have their sights set on securing energy resources around the globe -- and they aren't wasting any time.
"No surprise, leading the pack is China. Asia's sleeping economic tiger is waking with a roar, gobbling up global resources at a stunning pace -- including oil. It's the rip-roaring demand from countries like China and India that is lighting a fire under oil prices right now -- and stretching the supply-demand equation perilously thin...The tidal wave of growing oil consumption will likely trigger a global economic crisis. OPEC will have the United States over a barrel.
"...For every SIX barrels of oil currently consumed, only one new barrel is discovered. And that number is getting worse -- there were only 13 major oil finds (over 500 million barrels in reserves) in 2000, six in 2001 and two in 2002. There hasn't been any major oil discovery since then!
"And when the reality of higher prices hits with full force -- and I think it's coming very, very soon -- no one is going to find it more difficult to swallow than the spoiled, overconsuming United States.
"The crisis is truly devastating in scope and could end life as we know it in the United States."
Outstanding Investments is no longer edited by John Myers, son of Vern Myers, one of the famous gold bugs of three decades ago. This had a pleasing symmetry, because father and son's arguments were similar -- and we seem to be entering a similar financial era. (See my May 5 2004 column.)
But, wherever John Myers is now, the family spirit appears to be marching on at Outstanding Investments.
Two stocks Outstanding Investment likes are Valero (VLO: news, chart, profile) and Suncor Energy (SU: news, chart, profile) .
Both also appear on a list of integrated and exploration and production oil stocks currently recommended by more than two of the letters monitored by the Hulbert Financial Digest.
At least some of these letters think life as we know it will probably continue.
But they still like oil.
The third column indicates the number of newsletters recommending that particular stock.