Investors tend to think rosy thoughts when times are good, yet they are quick to expect the worst. The fact is that most investors get things wrong.

Concerns over limited future oil production in the Middle East point to the growing importance of domestic energy production. The Obama administration, just like every administration before it, appears adamant that domestic energy production must grow.

While there remain concerns about the future of offshore oil exploration in the wake of the BP (NYSE: BP) disaster, land-based drilling for oil and natural gas is a sector likely to see continued growth.

One standout contender is Patterson UTI Energy (Nasdaq: PTEN), a Texas-based company that drills onshore wells for other companies that explore for oil and natural gas.

Today we'll look at Helix Energy Solutions Group (NYSE: HLX), a contracting company that provides services to offshore energy companies. Helix Energy Solutions Group isn't a dividend payer like Carbo Ceramics, but it's attractive for an entirely different reason - its services should help get America's deepwater drilling in the Gulf of Mexico back on track following the 2010 oil spill by BP (NYSE: BP).

Oil companies that face potential supply disruptions won't be the best performers as oil prices move higher. Instead, smaller companies that can leverage higher prices will be the best bets.

OPEC meets in Ecuador this week. And with oil's recent advance to $90 a barrel coinciding with an increase in consumer spending, the main topic of conversation for OPEC officials will be whether to increase supply to offset rising oil prices.

 Saudi Arabia's oil minister is on record as saying that the acceptable price range for oil is $70-$90 a barrel. But influential investment bank Goldman Sachs is predicting that oil prices will average $100 a barrel in 2011.

 That forecast, however, may be too low. Some expect oil to reach $120 in 2011.

Ever since the Gulf of Mexico oil spill, BP has been very quiet about where it is drilling for oil. But the announcement that BP is raising cash by selling its stake Pan American Energy for $7 billion means that the damaged company is ready to start developing new oil fields.

This time, however, BP will not be drilling in deepwater. Instead, BP plans to produce 60,000 barrels a day from its partnership in a land-based Canadian oil field.

New technology has led to a renaissance of North American oil production. One such oil rich area stretches from Wyoming, through North Dakota and into Canada. Known as the Williston Basin, this geological formation includes the Bakken Oil Pool, which has at least 5 billion barrels of reserves.

That was an excellent rally yesterday! The S&P 500 broke through important resistance at 1085. For more insight, I will turn to my trusted sidekick, technical analyst for TradeMaster Daily Stock Alerts Jason Cimpl…   

 

After the weakness on Tuesday, I was beginning to doubt the bulls ability to take the market higher. The group came through yesterday and took back 1085, which needs to become support. Volume was low again, but internals were commendable as buyers out numbered the sellers by 5 to 1. Today the big resistance to watch will be 1103 and 1115. SPX 1103 stopped the market dead in its tracks last week. Stronger lateral resistance exists at 1115 which dates back to December 2009 and is also the 20 DMA and gap resistance.   

To call the explosion of the Deepwater Horizon oil rig and the subsequent well damage that’s allowed millions of gallons of oil spill into the Gulf of Mexico a tragedy is an understatement.   

 

Eleven men died when that rig exploded on April 20th. And now, critical fisheries along the coasts of Louisiana, Alabama and Mississippi are being destroyed. The commercial fishing industry in these states is threatened and a way of life for these fishermen may be coming to an end.   

 

An oil slick is reportedly nine miles off the coast of Pensacola.   

 

BP itself is under siege, too. The stock is in a virtual freefall as repeated efforts to cap the leak have failed. It could be months before the leak is stopped. Costs to the company could hit $22 billion. And that’s if BP didn’t do anything wrong. 

On Tuesday, I discussed in Daily Profit how cooperation between the U.S. and China was critical to helping investors get past the fears of the Euro debt problem, and keep the world focused on growth.   

 

I don’t think it’s any coincidence that last night, Chinese officials came out and said they were long-term investors in China, just as Treasury Secretary Geithner finished a round of meetings in China.  

 

This is exactly the type of cooperation I was talking about. China’s massive currency reserve and trade surplus are meaningless if the global economy goes back in the tank. So it’s in China’s interest to support the euro.   

I was trolling Bloomberg last night and I came across the following quote:  

 

“The volatility genie is out of the bottle and it will take some time to put it back…”   

 

It doesn’t really matter who said it or what they were commenting on. I initially dismissed it as one of those clichéd comments that just takes up space and doesn’t really add anything meaningful to the discussion.   

 

I mean, “volatility genie”? Come on.