Make 12X Your Money as Oil goes to $200 by July First! (Kent Moors)

by Travis Johnson, Stock Gumshoe | May 22, 2012 3:57 pm

Sniffing out the latest teaser from Dr. Moors' Energy Advantage

We haven’t covered a pick from Dr. Kent Moors for a while, the erstwhile Duquesne professor (actually, not erstwhile — he’s still there) has been a pretty active stock teaser over the last year as he tries to build up the subscription base for his Energy Advantage newsletter (along with a few other higher-priced trading letters), and readers have sent me lots of questions about his latest prediction of “oil to $200 by July 1!” … so I thought we’d better take a look.

Moors’ shtick is that he’s a highly sought after consultant in the energy business, with a client list that boasts many of the major oil companies and petro-states, and that these connections put him “in the know” as he chooses investments.

And he opens up, as he usually does, with a little self-congratulatory bit that shows off his connections:

“The Windsor Energy Group is a small network of foreign ministers, international banking executives, energy policy makers and Big-Oil CEOs.

“Every year, the 26 of us meet at Windsor Castle to discuss pivotal developments in the energy market.

“More importantly, we plan for their impact.

“This year, however, something unexpected happened.

“Twenty-four hours before I boarded the train to the Castle, several other Windsor attendees called me to an emergency briefing back in London.

“The meeting required absolute secrecy. No email. No cell phones. No outside communications.

“I can’t tell you the names of the people who were there.

“But what I can tell you is this:

“After talking with some of the most important people in the world about oil, I’m certain that $200 a barrel is now a low-ball estimate.

“And the spike is imminent.

Oil Prices Are Set to Soar on July 1st

I don’t know if Kent Moors is actually a member of the group — it’s a sort of annual advisory/think tank-y meeting about big energy issues, sponsored by oil companies and others — but he did speak to them this year (PR from Duquesne about it here[1], FYI). This year they had talks about most of the big issues you’re probably familiar with, including the opening up of the Arctic to oil exploration, and shale gas in Europe, and I’m sure they must also have talked about Iran.

Which is the point of that “July 1” deadline for the price of oil to hit $200 — Moors is indicating that he thinks the embargo of Iranian oil, which Europe has promised to respect by July first, will send the price soaring. I expect he knows a lot more about the dynamics of the international oil trade than I do, so you can make your own decision about how you think this will work … will Europe’s refusal of Iranian exports mean that those 600,000 barrels/day go off the market? Or will they be bought up by people who don’t care about the embargo? It’s a big political issue at this point, the July 1 deadline is “real” to the extent that it’s been talked up a lot, and that’s the date the EU says they’ll stop buying Iranian oil and, perhaps more importantly, will stop insuring shipments of Iranian oil, but the negotiations are ongoing with the larger Iranian customers in Asia (most Iranian oil goes to China, India, Japan, and South Korea).

So if no one will buy Iran’s oil, or if the Straits of Hormuz are shut down by Iran or by military action against Iran from Israel or elsewhere, the guess is that oil will rise further — and, of course, none of this happens in a vacuum: this is going on while many oil consumers are also cutting back because their economies are faltering a little bit, thereby reducing demand for oil (that’s right, we’ve got to worry about both sides — supply and demand).

And if oil rises to $200 this Summer as a result of the Iranian foofaraw, however it turns out, what will that mean for our wallets? Well, Moors says he’s got an idea to make you rich as a result … here’s how he describes the expected run-up:

“Crude oil inventories are at their lowest point in nearly 9 years.

“And now another 600,000 barrels a day are on the verge of coming off the market.

“What’s more, Europe doesn’t even have a plan to replace the lost supply.

“After talking to my sources in Brussels, I’m convinced that European leaders have absolutely NO idea how they are going to fill the gap.


“And that’s the problem.

“With less supply and constant demand – at a minimum – oil can only go higher.

“In this case, it could go up so high – and so fast – that you may pay more for a gallon of gas this summer than you ever have in your life….

“The Iranian embargo is about to trigger the biggest global oil shock we’ve seen since 1973.

“Remember 1973?

“Oil tripled.

“In three months.

“And yet this new embargo could have a much greater impact than the ’73 campaign.

“The market simply can’t withstand yet another big dent in supply.”

The market has obviously not been focusing on this with the same perspective as Moors in recent months — after all, oil has come down pretty hard from its highs in March, though it’s still higher than the lows set last Summer and Fall.

More importantly, if Moors is right, and if you know exactly when the price is going to skyrocket, you should be able to get rich, right?

Here’s how he puts it:

“All you have to do is make one simple move.

“Sooner the better…

“At current prices, if oil hits $200 a barrel on July 1st, you could see gains as high as 1,288% or more on this situation.

“That’s enough to turn a hypothetical $500 into $6,940.”

Smells like leverage, right? Indeed it is — though it sounds like he’s talking about the leverage offered by short-term options.

He makes clear that he’s not talking about trading directly on the futures exchanges, which is how most big-time traders would speculate on oil — it’s a bit of a pain in the neck for Joe Investor (you and I) to learn how to trade futures and to handle it effectively just to make one speculation like this.

And “pain in the neck for Joe Investor” means, if you ask a marketer, “I’m not gonna sign up for the newsletter if I have to do something complicated to get rich.” So Moors has a plan to play off of this expected spike in oil prices using some other investment. What is it?

Here’s his spiel:

“The Only Way Left for the Little Guy to Grab Big-Oil Profits?

“The opportunity I’m showing you today is simple. It’s a standard order you can place with any online broker.

“But the profit potential is anything but ordinary.

“You’re about to harness the awesome power of the futures market… without playing the futures market.

“If you’re familiar with oil trading, you already know that the real money in oil – the kind people live off of for the rest of their lives – is made in futures….

“You no longer need a million-dollar “rainy day” fund – or steel nerves – to play this game.

“The ‘little guy’ finally has a shot.

“This new trading tool is so simple, it’s like trading a stock. But it moves in lock step with the price of oil futures.

“And the best part is…

“You can use this tool to quickly pull in super-sized gains.

“So if oil jumps 62% – to the $200 price I expect – then you could see gains as high as 1,288% or more. All in the next three months.”

OK… so the clues are a bit limited, right? Never fear, that’s why we keep a giant tank of propane here on Gumshoe Mountain, to make sure our Thinkolator is always fired up and ready to go. Toss all those little clues in, and we learn that this is probably …

Options on an oil ETF.

Which is about as far as we can go with certainty … but if we speculate a little bit, we can figure out what the big deal will be:

Moors is not talking about West Texas Intermediate (WTI) crude oil — that’s not impacted as greatly by Iranian shortages, since oil that we’re buying in Cushing, Oklahoma to satisfy the WTI futures contracts is generally sourced from the US and Canada and travels in via pipeline. What he’s talking about, I’m quite sure, is Brent Crude — the oil contract that has become the standard for international seaborne trade in crude oil.

Which is not to say it won’t impact the US — quite a lot of our oil comes in via tanker and is priced off of Brent in some way. But it means, I think, that he’s probably talking about speculating in the price of Brent Crude versus WTI.

Which means it’s quite likely that he’s talking about the ETF that tracks Brent prices in the US — the United States Brent Oil Fund (ticker BNO).

And, more specifically, since he’s talking about oil going to $200 in less than two months and profiting by 1,200%+ from that move, he’s talking about speculating on the relatively near-term options on BNO.

BNO has options available for both July and October expiration, and I’d bet that the July expiration is probably cutting it a bit close and he’d want to give himself a little bit more time to be “right” and let the story play out. And coincidentally, if we look out at the October call options on BNO we can see that the highest strike price available right now also has an unusually large open interest (meaning, compared to the other contracts available, there are a lot more of this strike/expiration combination in existence) … which usually means either that there’s a large trader who’s standing apart from the pack, or that there’s a specific recommendation out there for this option contract from a newsletter.

That strike is the BNO October $95 contract, which means the buyer gets the option to buy BNO at $95 anytime between now and October 19 (that’s the option expiry date for October this year). And while the BNO October $90s have open interest of 140 contracts and volume today of 40 contracts, which is similar to all the other contracts out there, the BNO October $95s have open interest of 8,318 contracts right now and volume of more than 800 contracts today. So that’s enough confirmation for me to presume that Moors is pitching this option.

Can it really provide 1,200% returns? Well, here’s how it would work if Moors is right:

The current price of BNO is about $75, and Brent Crude is at about $108. If the fund does manage to track a spike in BNO prices — and it might do OK at that, since these kinds of futures-based funds tend to be better at tracking changes over a few weeks or months than they are over longer periods of time — a move to $200 Brent would mean a spike of roughly 85% in the oil price, so we’ll guess that BNO could also move 85% during that abrupt spike.

If you bought the BNO $95 call option, that means you could theoretically exercise your option at $95 and sell the shares at $140. You wouldn’t do that, since no one (OK, almost no one) exercises options when it’s easier to just sell them back to close the option contract, so since the option contract would be in the money we’ll assume that there’s not much of a premium built in anymore, and the $95 call option late this Summer, when Brent is theoretically over $200 and BNO hopefully keeps up and breaches $140, would be worth $45.

It costs about $1.25 right now, so that’s a return of about 3,500%. Which is a heckuva lot better than Moors was promising. So either he’s toning down the rhetoric and really trading for something a bit lighter like $160 oil, or I’m just wrong in my speculation about what he’s pitching.

There are also some even more leveraged ways to play Brent Crude on the stock market (without going directly into futures), if you’re so inclined — I have no idea whether or not oil prices will spike this Summer on Iranian issues or not, but if they do and Brent soars then the leveraged ETFs would likely, if they’re working correctly (and so far they’ve been fairly close at least in direction if not full amplitude), provide even crazier returns. That would be the VelocityShares 3X Brent Crude Long ETN, ticker UOIL, which is supposed to move three times as far as the Brent price in any given day — there aren’t options available on that particular ETN at the moment, which is probably just as well because it’s crazy enough already. If Brent had a steady upward move from $108 to $200 over the next few months, that ETN could theoretically have a steady upward move of well over 200%, though “steady” is key since these leveraged ETNs use a complicated mix of futures to hit their goals, and they really only have a hope of mimicking daily changes, so if there are big up and down swings the overall return can easily be significantly worse than the underlying index.

But the best solution I can come up with is BNO options for this Kent Moors teaser — so we’ll leave it at that, and open up the floor for questions and comments!

P.S. Moors also pitches a little stock that benefits from the disconnect between Brent and WTI prices in the other way, by buying up WTI and refining it into gasoline, thereby making better profit margins than the refiners who aren’t connected to Cushing via pipeline and have to buy Brent crude off of tankers. Here’s the brief spiel:

“And this gigantic energy traffic jam means that one well-positioned little refiner is getting its crude oil at a serious discount.

“It’s paying around $40 or $50 a barrel LESS than its competitors.

“It takes all that discounted oil and converts it into end products like heating oil and gasoline.

“Then it turns right around and sells those products for the inflated prices we’re seeing in the market right now.”

That’s not a lot of clues, but I reckon he’s still pitching the same refiner as he has in the past using this same basic story, Western Refining (WNR) — my article about his prior tease of this one is here[2], and it’s been doing well lately — he teased it in the mid-teens back in October and it was bouncing around between $12 and $20 for a while back then, but is now near the top of that range at about $19 and it’s getting some love from analysts with a couple upgrades this week. If Brent soars but WTI doesn’t, that would theoretically be a continuing advantage for them, at least in the short run.

  1. PR from Duquesne about it here:
  2. Western Refining (WNR) — my article about his prior tease of this one is here:

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  1. Avatar
    May 22 2012, 05:19:05 pm

    Don’t know what he is touting now, but earlier in year he pushed some call options on various oil companies and the etf OIL. The OIL calls I had expired worthless and I cancelled his newsletter when the various shares I bought went south. I recall him saying sell one half of LNG and then rather quickly saying buy them back. Bought some more OIL calls a few month ago June 16 at 80 cents, which are currently worth 2 cents each. Doubt they will do anything before his magically July 1st date. I think his earlier guarantee was that if oil wasn’t $150 a barrel by 7/1, your subscription would be free. Now I wonder if oil will rise significantly at all this year. I am hoping African Oil will continue to do well and some of my shares are up 300+% so far this year. Moors was not responsible for that nugget though.

    • 11400 |
      Travis Johnson, Stock Gumshoe
      Travis Johnson, Stock Gumshoe
      May 22 2012, 06:58:01 pm

      Yes, I’ve seen him do a lot of options trading talk before as well — which strikes me as getting a bit out of his wheelhouse and really “reaching” for spectacular gains. He’s supposed to be a content/subject expert, not a trading expert, and it takes a lot of trading expertise to manage options recommendations for a substantial mailing list of folks. I do a bit of options speculating on my own from time to time, and it usually turns out badly (every once in a while a 10,000% return comes through to keep me trying, but most speculative options trades go to zero) — I wouldn’t want to be making those suggestions to all my readers.

    • Avatar
      May 22 2012, 11:37:44 pm

      Well, now i don’t have to worry about any ethical issues concerning revealing privileged information since aoibhneas has spilled the beans–yes, his “teaser” recommendation was to buy OIL options, which I did, and then proceeded to lose most of my money after I was stopped out at a 70% loss. Moors has been wrong on ALL of his timing so far–he originally predicted $200 oil by March 1 due to constriction in oil production versus demand–forget about any black swans as the cause. I was stopped out of a few equities, also, based on his prognostication. His original guarantee was “if between now and July 4, 2012 oil fails to top $150 a barrel…if gas doesn’t hit $5 per gallon…if you don’t see at least one opportunity to notch 2,250% gains from his “constriction play” recommendations- simply let us know and we’ll see to it you get your subscription fee back and Kent’s Energy Advantage service free for a full year”. Well even though there are obviously quite a few who can commiserate over their losses based on this genius’s recommendations, its hardly compensation getting your $49 back, and as for next year’s service–well maybe I’ll use the paper to wrap fish in it from the fish market.

      • 62
        gene towba
        Oct 9 2014, 07:35:33 pm

        I had a subscription too and was amazed at how this guy is always wrong. The joke was to do the opposite of what Kent recommends in order to make money. In fact, the whole “Money Morning” crew could not find a winning stock in an Apple store.

  2. Avatar
    May 22 2012, 06:21:18 pm

    This guy is worthless…….No way the Obama Administration is going to let this happen right before the election…….There are values in junior oil stocks….But this guy is pretty slippery….

  3. Avatar
    May 22 2012, 07:28:10 pm

    Getting back to the question at hand: Is it a good trade?
    What do you all think about the EU imposing the already passed (date delayed) embargo on Iran on July 1st? And would this cause a spike in oil? Does Obama have the influence to stop the EU from imposing the embargo? Also, the embargo is only one factor of the equation, the research I have made on the embargo is that it will also effect the insurance on the tankers that carry the oil. Insurance now is provided mostly by the UK, which would be banned with the embargo.
    I believe that there is a meeting tomorrow (5/23) with the Iranians in Brussels to discuss the nuke concerns.
    Is buying Oct. calls a good speculation?

    • 11400 |
      Travis Johnson, Stock Gumshoe
      Travis Johnson, Stock Gumshoe
      May 22 2012, 08:10:44 pm

      I expect oil to go up over years, but I think a bet on dramatic change due to the sanctions is extremely speculative — everyone knows the full story, the sanctions and the July 1 date have been well covered in the news and are well know. By all the oil traders. It’s certainly possible that we could have an oil shock on any one of a variety of geopolitical developments involving Iran, Saudi Arabia, Israel, or even Russia, but betti g with options means you are quite certain about when a shock will come … Or you’re just gambling with weak odds.

    • Avatar
      May 23 2012, 08:49:24 am

      I believe that Europe now and always has , bought and sold to “US imposed sanctioned countries” . The USA used to have clout with their threats to everybody and their brother(s) if they dared to go against a country for not imposing the will of the USA to these countries. Yet, i hear no one in Europe complaining about shortage’s ,lots of them go around these “sanctions” anyway, via a myriad of other transportation companies that are willing to take this “nameless” freight and deliver where ever they pay the most. No one cares anymore what the USA will imposed on anybody. The dollar is weak , other countries are already trading in their own currencies, or as in the case with China , gold. So in conclusion, this Moors “Teaser” is totally obsolete , and worthless. Europe will get what they need , no matter what the USA says . and the July 1st. deadline will come and go un noticed. If there is a spike it will be short lived , and more a banking theft by Ganksters ( ganster and banksters) and the loss of value in our currency.,

  4. Avatar
    May 22 2012, 07:34:23 pm

    I bit on an earlier Kent pumper
    If this guy is an Insider…why do most Picks go to zero? I’m down $$
    Have tried to unsubscribe numerous times but still get his daily pumper “buy my newsletter”
    Gumshoe…how are the AZZPADs working? Less painful learning how to snowboard?

  5. Avatar
    Joe Severa
    May 22 2012, 08:17:10 pm

    Most of your thoughts (& losses) are correct, this guy is a disaster like forever. Never fails to go bullish for any reason, not t/b believed IMHO!

    • Avatar
      Michael Adler
      May 22 2012, 11:05:46 pm

      Kent Moors is a professor, I think of political science, at Duquesne University, a relatively undistinguished college in Pittsburgh. He suffers from the intellectual arrogance shared by many academics that is reflected in his confidence in his predictions. I suspect he is now regretting being so certain about his prediction that Iran would block the Hormuz straits on July 1. He should, perhaps have realized that there was large element of bluff in the Iranian threat. In fact, it seems increasingly likely that the Iranians will be able to trade the appearance of just enough international access to their underground sites to get some of the sanctions removed – and then, there will be no blockade and no oil price spike.
      On the personal side, I have more sympathy with Dr. Moors than is evident in the comments, above. I even wish that he could be right; that the West not retreat on the conditions that need to be imposed on Iran; and that the Iranians could be forced to the brink of imposing the blockade – all of which would probably make his price forecast come true. But, can anyone see the US making really belligerent noises in an election year?

  6. Avatar
    Robert Palmer
    May 22 2012, 09:38:51 pm

    Kent has all of the important people in the energy business on speed dial. That’s why his picks bomb so consistently. $200 oil by July 1. I will officially eat my sombrero if that happens.

  7. Avatar
    Jerry Eisner
    May 23 2012, 05:44:02 am

    Hi Travis, Great work as always. What about the thing from Ken Fishers about retirement and four ways to make sure you will not lose your money. Can you talk about that one from a teaser point of view? Sounds like he may be an advertiser of yours which would put you in a poor position to talk. But i’m kind of wondering what would happen if i were to send him all my e mail info etc. If you can comment on this type of strategy that these advertisers use i would love to hear your take. Thanks. Je

  8. Avatar
    May 23 2012, 06:15:49 am

    As a child I was admonished as follows: If you cannot say anything good about someone, don’ say anything. End of message.

  9. Avatar
    May 23 2012, 09:58:45 am

    You are right on. the BNO oct 95 was the recommendation. The reason the returns don’t seem right is that it was $3.20 for the call when he published it. I like reading his analysis of things but haven’t used his specific recommendations as of now.

  10. Avatar
    Marc P
    May 23 2012, 10:07:19 am

    I took a two year subscription and lost money on most of the recommendations. I tried to get out of my second year and could not get my money back. I saved myself a few bad trades because I passed on every one of his option plays. He might know a bit about the oil business, but he doesn’t have a clue about trading options. I actually don’t think he knows anything about investing either. Just got lucky on a few picks and bombed on most of them. Kent Moors needs to back away from selling a newsletter and stick to Government advisory, which as we all know, is just hot air.

  11. Avatar
    May 23 2012, 12:17:23 pm

    What an excellent education. Travis you might consider publishing a book full of these observations called “Don’t Bite” or something like that. Many “trader/investors” would benefit by hanging on to their hard-earned cash.

  12. Avatar
    Norman C Keil
    May 23 2012, 05:27:17 pm

    I’m surprised at the negativity here. I have done a number of option trades, LNG & VLO come to mind, that have made good money and some that have not. I am not an options expert but know enough that, for example, selling UGA puts has paid for my gas for 2012. Kent provides excellent insight into why oil prices do what they do, what’s happening and where wrt shale oil and natural gas. He identifies opportunities but it is up to each individual investor to make the trades so you have to do your due diligence. I have passed on many of his suggestions but the information that he passes along is worth the price of admission. I will continue to subscribe, evaluate and follow thru with opportunities that Dr. Moors suggests although my preferred trading style, put spreads, may not be what he is recommending.

    • Avatar
      Gerry Spraitzar
      Jun 23 2012, 11:47:55 am

      Norman, I agree. I have learned a whole lot about the oil business from the newsletters for sure. That in itself, was worth the teaser subscription rate for me. Don’t know if I will renew as I have another 6 months left. On the other hand, I have followed his recommendations for trading and it appears from the surface to be less than stellar (as mentioned by others in the blog).

  13. Avatar
    May 23 2012, 08:32:57 pm

    I also follow Moors. LNG seems like the only thing that has worked. I guess even a blind hog will find an acorn now and then.

  14. Avatar
    Homer Sympson
    May 23 2012, 08:56:32 pm

    The guys who took the other side of Moors’ trade recommendation are making a killing. I’m sure that 99% of them are market makers in the underlying equity and I have a little fantasy playing in my head that goes something like this: MM(a) calls his buddy MM(b) and shouts exultantly into the phone “Joe, that Moors guy just recommended another option play on oil. Quick get in there and sell all you can to the sheep! You can thank me later.” Heh heh.

    BNO Oct. 95 call closed today at $1.05 bid. Ouch.

  15. 23 |
    Russel Kennel
    May 24 2012, 02:02:56 am

    I subscribe to Moors’ Energy Advantage and have had a number of his picks since Feb – all down. I’m in and out – now, mostly out of all of them, and they are down some more. When Moors says “buy” I sell, and when he says sell, I look at buying, because when he says “sell” the stock has already tanked and is near bottom. To his credit, I would be up more if I had started back in 2011 when oil was making its run.

  16. Avatar
    Terry Westerhoff
    May 27 2012, 10:02:34 pm

    If Kent Moors were tied into the oil industry as he would have us believe, why not quietly invest his own money and become a gazillionaire? I’m with Robert Palmer – if oil is $200 by July 1, I will also eat my sombrero!

  17. Avatar
    Jun 2 2012, 02:32:23 pm

    Moors claims that oil inventories are at their lowest in nine years? Really? I have read in other sources that oil inventories are at their highest levels since 1990 and that the current high prices for oil are entirely out of sync with existing inventories. Who is right?

  18. Avatar
    archivesDave Clumpner
    Jun 19 2012, 08:28:16 pm

    POOR OL’ Kent !!!
    BUT then u know what they say about a broken clock…
    Guess we’ll have to wait a few more hrs, days, or years before anything he commands
    comes true…LOL!

  19. Avatar
    David Decher
    Jun 20 2012, 01:28:16 am

    July 1st is right around the corner. Perhaps Kent meant that Oil was going to start to rise to $200 at that time. Well I doubt it very much. Although I like my SDRL rising along with oil prices. Most of what I am hearing is NYMEX Crude Oil is a buy at anything below $80. Today it closed up at $84.03 because of Euro strength and Fed meeting. I have UCO and SCO on my Watch List.

  20. Avatar
    Jun 20 2012, 10:39:31 am

    I tried out 3 of his recommendations and have lost a few thousand ££ so far.
    I won’t be following any more.
    As my wife warned me, ‘if he is so good why is he telling everyone’?

  21. Avatar
    Musa Ali
    Oct 7 2012, 12:43:09 pm

    ok so i read this article in OCTOBER and well Brent oil did apparently rise after july. it didn’t go to $200 of course, more like $117. So…. was he right? those October calls would have been fruitful, no? Maybe not as much as predicted, but a definite profit!!

    • Avatar
      Nov 1 2012, 05:02:16 am

      I bought those BNO OCT 2012 call options at 70 cents in late June, they tanked from there, closed out at .05 cents in October never saw them once enter an in the money position. I think one day in August they hit .70 cents again. I can’t speak of his credentials but I can say he was way off the mark here and it cost me a a fair amount of skin. In my book Dr. Moors is is a charlatan.

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