“We are willing to supply any shortage which may arise,” said Saudi oil minister Ali al-Naimi.

The “we” in the statement above is OPEC, the Organization of Petroleum Exporting Countries. Don’t be fooled, though, OPEC is not your friend, and if you believe OPEC will come to your rescue when your oil runs out, I have some magic beans to sell you.

OPEC is made up of 12 oil-producing nations, including, Iran, Algeria, Angola, Venezuela, Nigeria, and Libya—and many of them are quite hostile toward the US. Ironically, most of the oil produced within the OPEC nations was originally discovered and developed by American companies.

“One hundred dollars is a fair price for everybody—consumers, producers, oil companies. It’s a fair price. It’s a good price,” said Saudi oil minister Ali al-Naimi.

Fair price? How does OPEC determine US$100 is a fair price?

In a 2009 issue of the Casey Energy Report, we stated what the price of oil needs to be for the members of OPEC to balance their budgets. We dug deep into their budgets and determined that for the governments of the OPEC countries to fund all of their social programs, they would need US$80 per barrel of oil.

The fair price of oil changed in 2011—the Arab Spring transformed the input values for “fair price.”

The end result of the Arab Spring presented a harsh reality: all of a sudden, it cost the OPEC nations more to fund their social programs and prevent another social uprising. Take Saudi Arabia, for example, which committed over US$35 billion to education and housing subsidies, jobless benefits, and debt write-offs. The government even created a sports channel with those funds to keep all the unemployed guys occupied watching sports, rather than scheming another uprising.

Don’t expect another Arab Spring this summer, as the Saudi population now has access to the Soccer World Cup. My money is on Messi and the Argentines, but that’s a whole different issue.

Other OPEC members have followed the Saudis’ subsidization program, which they finance through higher oil prices.

So, back to the topic of oil. OPEC countries produce over one-third of the world’s oil, and most of the world has become addicted to OPEC oil—but there is one thing we have that they don’t.

I mentioned earlier that most of the oil and gas deposits whose fruits OPEC is reaping today were originally discovered and developed by American companies. Again, let’s take Saudi Arabia as an example. The crown jewel of Saudi Arabia is the gigantic Ghawar oil field, which was discovered in 1948 by Americans working for a company called Arabian American Oil Company (now Saudi Aramco), but the American companies involved that did all the exploration and development are known today as Exxon and Chevron. By 1980, Saudi Arabia essentially “nationalized” and purchased a 100% interest in Aramco.

The American Dream

There is a lot wrong with the United States of today, starting, in my humble opinion, with the president. But even Obama’s awful leadership can’t kill the power of the American Dream.

America is still a nation of freedom where everyone has the opportunity to prosper, succeed, and move up the social ladder—through hard work, not your birth right or who your father is. Sure, there are many fortunate sons in the US, but they usually lose out to you and me, the disciplined, hardworking, smart people wanting more out of life.

You are reading my missive because you know what I know: There is a fortune to be made from oil, and you want your cut. But you also know nothing comes easy.

Saudi Arabia is the leader of OPEC and has been for years. The Saudi oil minister has come out and stated: “There is no reason for a change. Absolutely no reason.”

He’s referring to the “perfect” price of US$100 per barrel for their oil. OPEC believes, and is correct to believe, that the global economy has accepted that US$100 per barrel. That’s what OPEC members need to prevent any further uprising and to stay in power.

But the Americans haven’t been twiddling their thumbs…

Unlocking the American Dream

There is a lot America can do with US$100 oil, because that price suddenly makes alternative oil extraction methods economical and opens up brand-new avenues for profit.

The next big thing in shale, for example.

There is an onshore oil and gas basin in North America that is about to turn the oil and gas world upside down.

This isn’t some maverick junior explorer’s pipedream. In fact, it’s taking the industry insiders by storm. They’re pulling out their checkbooks to play, and so are we.

Last month, we took profits on a stock in our premium alert service, the Casey Energy Confidential, that—if you had invested in the open market according to our recommendation—would have given you +400% gains at current prices. And this is just early days in one of North America’s best shale oil and gas formations.

In fact, just this past week, management of one of the largest pure gas producers came out on their investor conference call saying their results were almost 300% better than they anticipated. Insiders in the oil patch already label the potential of this shale formation as world class.

Profit from the Oil Cartel

I learned long ago that investing in the oil sector, “You can either be a contrarian or a victim,” as my friend Rick Rule likes to say. If you’re the average American hoping for OPEC to rescue you, you will suffer from US$100 oil.

Play to win and try out the Casey Energy Confidential. This unique email alert service has no fixed publishing schedule. Alerts and special reports are issued when the most profitable and unusual early-stage energy opportunities present themselves—such as the special report I am putting together about the world-class shale formation I mentioned earlier.

What Do You Get with the Alert Service?

A lot. It’s really a 3-in-1 deal, because you’ll get free and unlimited access to the Casey Energy Report (a $995 value) and Casey Energy Dividends (a $79 value) with your Casey Energy Confidential subscription.  Click here to learn more about this special opportunity…