A Reason for Higher Oil Prices
May 21st, 2008 | By Charles Delvalle | Category: Oil Investment & Alternative EnergyI’m going to show you a very important chart below. It’s one that shows one of the biggest drivers for higher gas prices.
Chart Courtesy of the Energy Information Center
You see that little red dot on the chart above? That little dot shows that worldwide oil production peaked in July 2005. Since then, new production hasn’t been enough to offset the falling production rates of older wells all over the world.
So is it any wonder why oil prices are hitting new highs nearly every single day?
Listen, many people are calling this climb in gas prices a bubble. But this rise in gas prices is driven by solid fundamentals!
Contrast that to the internet and real estate bubbles which were driven by nothing more than the ‘hope’ of higher prices.
And with summer driving season coming upon us, you shouldn’t be shocked to see gas prices climb even more. The only thing that could take oil prices down is a nasty worldwide recession. And that’s a scenario which looks far from happening in 2008.
But if you’re worried about a short-term price drop, then wait for the prices to drop and then get into the United States Oil Fund (USO). As the price of crude goes higher, so does this ETF.
Good trading,
Charles
Source: A Reason for Higher Oil Prices
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Charles Delvalle is a self-taught market-timing professional and value analyst who uses a combination of technical indicators and fundamental research to achieve consistent gains on stocks, commodities and options.
Charles is also a staunch contrarian and takes pride in finding undervalued sectors and discovering great companies on the cheap. He questions government reports and the status quo. In addition to swing trading options, Charles is also Co-Editor of the monthly advisory service - INCOME.
