I'm writing to you this morning from a hotel in Washington DC where I'm attending an energy conference.

It's being hosted by the Association for the Study of Peak Oil and Gas (ASPO). I'm joined by two of my Wyatt Investment Research colleagues, Brit Ryle (a researcher, analyst and 10 year veteran of the investment research business) as well as energy analyst Gregor Macdonald, editor of Energy World Profits and all-around expert on the topic.

I've been urging readers to take a look at Gregor's research because he really knows his stuff, and because you need to be aware of what's coming down the pike. I sincerely believe energy is THE issue that supersedes all others.

For instance, we know that the Federal Government is broke, and that unemployment is high, and that we have crumbling infrastructure and a housing market in shambles. We have many problems to address - but fixing these issues won't be worth a jar of spit if we don't have access to affordable energy.

There's a lot of buzz in the oil markets these days, and while we've been kind of lulled into complacency with oil in the $75-$80/barrel range, this situation won't last forever.

It might not even last for long, and right now there's a unique opportunity to buy a highly specialized mid-cap oil company. I'll get to this company in a bit...

In the meantime, the United States currently has one of the largest stockpiles of oil it's ever had, with over 1.13 billion barrels of petroleum inventory - or about 60 days worth of supply at current rates of consumption.

The news immediately caused oil futures to dip - briefly below $75 a barrel.

That'sabout the average price for 2010, year to date:

I’ve long advocated that responsible citizen-investors should eat their own cooking.  If you go to McDonalds (NYSE: MCD) three days a week, it only makes sense to be a McDonalds shareholder.  If your lifestyle choices are reflected in your portfolio, then you’re already in a good position to understand the fundamentals of the companies you own.  Conversely, if you’re buying companies that you don’t understand, then you’re setting yourself up for failure.

And there are other benefits.  If you’re a consumer of, say, crude oil, why not invest in companies that reap the reward of your diligent consumption of gasoline, heating oil, and other petroleum products?

According to AAA, the average car uses 533 gallons of gasoline every year.  At $3 a gallon that means it costs about $1,600 a year to run the average car for a year.

So the question is: how can you get $1,600 a year from oil companies?

Today, I’m going to discuss one of the most elemental ways that “they” hedge their bets, and how you can use it in your own portfolio to profit every time.
First, there are a few important facts you should know about crude oil and the petroleum products we get from it.
You might notice that spikes and dips at the gas pump don’t necessarily track exactly with spikes and dips in the price of crude oil. That’s because only half of all crude oil gets turned into gasoline. The other primary products are diesel fuel, jet fuel and heating oil.
As you might imagine, demand for different petroleum products fluctuates seasonally. Heating oil prices rise in the winter. You might think that the southern hemisphere’s “winter” would even out the fluctuations, but the northern hemisphere has 90% of the world’s population – so it’s the northern winter that drives heating oil prices.

A gusher of positive news has sent shares of Gulfport Energy Corp. (Nasdaq: GPOR) sharply higher in recent weeks. Just as motorists have found that pump prices have remained well above $2.50 a gallon since spring, Gulfport’s stock price is showing no signs of dropping back into its former trading range.
 
In fact, Gulfport’s share price is sending its market capitalization right out of the small-cap arena. Still, there could be some buying opportunities if there’s a market pullback – or, more likely, profit-taking by the patient investors who stuck with it. 

Gulfport Energy is an independent oil and natural gas exploration and production company based in Oklahoma City. The company, founded in 1997, has its principal producing properties located along the Louisiana Gulf Coast, along with some exploration activity in the Canadian oil sands and a smattering of activity in Thailand. As of Dec. 31, 2006, the company had 23.2 million barrels of oil equivalent of proved reserves.

Until the Gulf Coast was ripped apart by hurricanes Katrina and Rita in 2005, Gulfport Energy was truly a small-cap stock, trading in the $2-$5 range. Then it began taking off, riding the wave of a production fall-off and soaring oil demand.
 
The global demand for commodities, especially petroleum products, has helped push Gulfport Energy out of its stock trading rut, seemingly for good. In May, the company was listed among the top 100 growth companies compiled by BusinessWeek. Just as the big boys in the oilfields have seen their profits soar along with oil prices, Gulfport Energy’s profit has increased 308%, on average, over the past three years, BusinessWeek noted.