With the cost of gasoline skyrocketing and practically every politician in America on the drilling bandwagon, it would seem as though Peak Oil is finally beginning to dawn upon all of its doubters.

It was as if crossing the $130 mark on oil was akin to crossing the Rubicon.

You may remember the story...

It was the 49 BC crossing of a small stream in Northern Italy by Julius Caesar and his army that made a bloody civil war all but inevitable for ancient Rome. Crossing the stream, Caesar remarked, "A lea iacta est," or, "The die is cast."

Otherwise known as... the point of no return.

That, in a way, is what the energy markets are pricing these days as people come to the realization that Peak Oil isn't the work of some lunatic fringe. It's real, and it's here.

Case in point:

Just last month the Paris-based International Energy Agency (IEA) made an announcement that shook the energy complex. The group stunned the markets when it revealed that it's preparing a sharp downward revision of its oil-supply forecast.

And while its findings won't be released until November, the message of the group was crystal clear: Crude-oil supplies are far tighter than previously thought!

That was a stunning reversal for a group that had basically said supply would meet demand on into the year 2030.

The group predicts 116 million barrels a day are in demand, but worries that oil supply will struggle to break over 100 million barrels a day over the next two decades... due to oil production declines.

So, then, how much investment does the IEA think it will take to smooth out this huge supply and demand imbalance?

Well, here's what they said last year, in response to the Peak Oil crisis. According to their World Energy Outlook report, "Some $22 trillion of investment in supply infrastructure is needed to meet projected global demand."

Now think about that figure for a moment, because it is as enormous as it is mind boggling.

And now consider this.

That was long before this shocker from Fatih Birol, the IEA's chief economist. In its most recent report, Birol said, "One of our findings will be that the oil investments required may be much, much higher than what people assume," he said. "This is a dangerous situation."

So $22 trillion is just the starting point on a journey that could easily double this astonishing figure.

Either way, that's enough needed investment in the energy complex to keep it going for many, many years to come. That's why we're so bullish on energy in general, including natural gas.

Let's face it. When the price of oil doubles in a year, and natural gas jumps by 136% in 10 months... the business of finding and drilling for energy becomes white hot.

That's why all of the unconventional shale plays in the Bakken, Haynesville, Fayetteville, the Barnett, and more recently the Marcellus shale, have all gone hyperbolic. You see, they're ready to produce energy right now... not in some time frame so far down the road that the market can't even see it!

Consequently, shares of the majors like ExxonMobil and Royal Dutch Shell have barely budged, while smaller players like Continental Resources Inc (NYSE:CLR) have jumped out of the box.

But don't just take it from me. Give these charts a quick look, and tell me which one you'd rather have bought a year ago.

 

 

It's no contest.

But it's not just the exploration and production companies in unconventional oil that have seen their shares rise. The oil services companies that work with them-the ones extracting all the energy-have benefited as well.

You see, shale is "tight rock," making it difficult to extract without some serious help. As a result, the rock itself needs to be fractured or cracked all along the well before the oil or natural gas can flow from it.

Moreover, before the fracturing can take place, it takes 3-D seismic mapping and horizontal drilling techniques to hit the energy-rich layers of shale buried deep underground.

However, when these techniques are successful, the result is an oil or gas well that can basically print money.

That's what Richard Findley and his partners ended up with eight years ago in their Elm Coulee site. Findley and his group were the first to successfully tap what has become known as "The Bakken"... long after Big Oil gave up and went home.

Since then, the Elm Coulee area is believed to contain some 250 millions barrels of oil, making it the biggest find in the lower 48 states in the last 56 years.

Now let's do the math on that one.

It would be 250 million X 130.00, or $32.5 billion. That's 325 followed by eight zeroes... not a bad haul for an area abandoned by the big boys.

So it's no surprise that the share prices of the companies involved in all the new drilling are firmly in a bull market.

Still, there are many other profit plays that the majority of investors aren't privy to.

In fact, I've closed 10 positions in The Wealth Advisory with seven winners averaging a 29.69% gain. Here's what we've done so far:

• Adobe Systems Inc. (ADBE: NASDAQ) closed with a 32.28% gain in 11 weeks.

• Converted Organics Inc. (COIN: NASDAQ) closed with a 42.11% gain in two weeks.

• FXP UltraShort FTSE/Xinhua China 25 Proshare (FXP: AMEX) closed with a 27.23% gain in four weeks.

• Morgan Stanley China - SHORT POSITION (CAF: NYSE) a 32.51% gain in four weeks.

• PowerShares DB Commodity Idx Trking Fund (DBC: AMEX) a 14.26% gain in eight weeks.

• PowerShares DB Energy (DBE: AMEX) a 15% gain in nine weeks.

• VMware Inc. (VMW: NASDAQ) a 44.44% gain in eight weeks.

And that's just the tip of the iceberg, considering what's going on in the energy markets.

Make no mistake... The energy bull market still has room to run. After all, when you cross the Rubicon, there is no telling what might happen.

Your energy-loving analyst,

Steve Christ

Chief Investment Analyst
The Wealth Advisory

PS. The Wealth Advisory team has uncovered a new oil and gas play with a fast-growing business model that's taking the unconventional O&G world by storm.

The Bakken, Barnett, Haynesville, Fayetteville, the Marcellus... and even Russia. You name the hot spot, and its products and services are being used there.

The best part is... The company's share price is on the verge of a major break out that could give it a 25% gain or better... even in this down market.

Click here to find out more about this company, and to learn how you can grab your slice of the $22 trillion pie.

http://www.angelnexus.com/o/web/6369 

"Energy stocks... The only way a human is going to make any money."

-- Matt Simmons, Peak Oil's first and most vocal proponent,
and founder of the country's last pure play energy investment banking firm.

Follow the money trail. Sign up for Energy and Capital now.

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F.E. Chalfin Et al.,

I've initiated 24 positions in 2008. I've closed 10 positions with seven being winners averaging a 29.69% gain. Here's what we've done so far, including the 3 losers.


Adobe Systems Inc. (ADBE:NASDAQ) closed with a 32.28% gain in 11 weeks.


Converted Organics Inc. (COIN:NASDAQ) closed with a 42.11% gain in two weeks.


FXP UltraShort FTSE/Xinhua China 25 Proshare (FXP:AMEX) closed with a 27.23% gain in four weeks.


Morgan Stanley China--SHORT POSITION (CAF:NYSE) a 32.51% gain in four weeks.


PowerShares DB Commodity Idx Trking Fund (DBC:AMEX) a 14.26% gain in eight weeks.


PowerShares DB Energy (DBE:AMEX) a 15% gain in nine weeks.


VMware Inc. (VMW:NASDAQ) a 44.44% gain in eight weeks.

Here are the losers..... two short term bets on gold. And a loss on a stock I bought back after I sold the first time for a 77% gain.


Couer D Alene Corp. CDE- Bought $4.70 3/10/08 -Sold 3/20/2008-$4.18 - Loss 11%

Eldorado Gold Corp. EGO- Bought $7.00 3/10/08- Sold 3/20/08 $6.24- Loss 10.8 %

Sigma Designs Inc. SIGM- Bought 3/18/08 $21.00- Sold 4/15/08 $17.50- Loss 16.6 %

Not bad for bear market. Thanks for reading and for writing.


Sincerely,

Steve Christ, Editor

You state that you closed 10 positions with 7 for gains. What were the other 3?

Tuscaloosa Marine Shale - Encore and XTO the next big plays

you guys always list your gains how about listing your bad picks along the way

You do good work. One that you have not yet spotted is SUF. Check the footnotes in the latest K-4 and listen to the CC next Wednesday. JB

How much of this information in this report is fact or fiction?? We have been listening and reading about reports on the Bakken for some time now. Most if not all of the information is overwhelming and terrific news. When I mention the Bakken to family and friends they look at me and think I have a noodle loose. Although the information is very gradifying it puzzles me that not too many people arer aware of it's existence. If this information is true, and crude is ready to be extracted from the source right now, why hasn't it been done?? Why aren't the American People made more aware of this discovery, and will we see some of the benefits from this discovery soon??? We definitely need our independence from the Middle Eastern Oil producing countries, and the sooner the better. I am not an investor, only a concern person worried about America's future and her Economic Crisis. As one of the many more knowledgeable persons pertaining to the Energy in the global world we have a reason to be worried about our fuel demands and progress of production. We are at the point of no return, simply because the average person is unaware of what action to take to relieve the energy crisis.