But, now I think oil has bottomed and will head higher. My fundamental and technical indicators are pointing to higher oil prices.

It’s disappointing that Americans seem to forget about our dependence on foreign oil as oil prices drop. In the 1970’s we got a wakeup call when people experienced gas shortages and rising fuel costs. Then it happened again, when oil spiked up to $147 a barrel last July. You heard lots of talk of switching to electric cars and cutting off our addiction to foreign oil. It’s disheartening that you don’t hear much about this anymore because now we have our cheap gas again.

We need to wake up and focus on finding alternatives to gasoline as the power source in our automobiles. It is time to get off this quickly depleting natural resource. Now that oil is cheap again we see people going right back to their old ways. Americans are starting to buy gas-guzzling SUVs again and the carpooling trend is tapering off. Oil demand will return and oil will go higher again.

We might as well profit on the next surge in oil prices. I think we are looking at a spring rally. The bottom in crude back in December was at $32.48 per barrel. This will likely serve as the low in this cycle. I circled crude oil’s highs and lows on the 5-year chart below to give you a perspective.

Here are just a few reasons why I think oil will run higher:

• There are many potential geopolitical flash points around the world that can flare up at any moment which could disrupt oil supply
• OPEC plans to meet Sunday in Vienna, and a few of the cartel’s leaders have said more production cuts are to be expected
• Crude oil prices held up in the face of new 12-year lows in the stock market last week; this is very bullish for oil
• Oil exploration companies increasingly drilling for oil in harder to reach places, and this adds to the cost of exploration and results in higher oil prices
• Most of the world’s cheap oil has already been discovered, and many experts think the world is running out of oil
• Soon we could see demand increase to a level that will start to exceed supply. Demand will grow in the years ahead as India and China continue to modernize.

While oil inventories are high right now, they may start to decline towards the end of the year. I suggest you start looking at investing in oil over the next few months and use big down days as buying opportunities.

If you invest in oil, keep an eye on the economy. If the current slowdown gets worse and last longer than expected, it could have negative effects on oil prices. Currently my indicators are pointing to higher oil prices in the near term.

The world’s utter dependence on oil remains unchanged. I believe the upside for oil prices is now much greater than the downside in the near term. I think the worst of the great oil bubble burst is behind us.

My esteemed colleagues wrote some great articles on oil recently. Dr. Russell McDougal wrote a great article on oil titled “Don’t Get Comfortable With Cheap Oil. And, Steve McDonald wrote an excellent piece titled “$75 Oil This Year and it Can Put a Lot of Money in Your Pocket”. I suggest you read their articles; they give some great ways to profit as oil prices rise.

Source: It’s Time to Invest in Oil Again!

Based in Silicon Valley, the company is negotiating with governments and car makers to set up networks of charging systems for electric-car batteries.

The New York Times ran a story today about how Hawaiian Electric Company endorsed the Better Place system of rechargeable stations and swappable batteries. Better Place already has garnered endorsements from Israel, Denmark, Australia, Renault-Nissan and a coalition of Northern California.

In essence, the endorsements constitute permission for Better Place to install its system.  Here’s how Better Place makes money for investors:

Drivers pay to access a network of charging spots and conveniently located battery exchange stations powered by renewable energy.
– Drivers pay for the miles they drive.
– Cars are made much more affordable—even free in some markets—by the business model’s financial and  environmental incentives to add drivers into the network.
– Better Place operates the electric recharge grid that brings it all together.
– The company operates a grid of wind and solar power that resells excess back to the public grid.

But can this really work?  Do the numbers make sense? And does the downward mobility of most Americans constitute a real market for electric cars and companies like Better Place?

We think the answer is “no” and here’s why…

As of 2007, when gas prices were on the rise, the price premium for a hybrid (a gas-electric vehicle) was about $5,000 versus a conventional gas-burning vehicle. Even at those higher gas prices, the break even for a hybrid compared with gas was six to 10 years. Today, with gas down 2005-2006 levels, we can only estimate that the break even for a hybrid would be extended to 10-15 years.

And that’s for a hybrid. As Detroit’s Big Three hammer out plans for greener cars, we still don’t know what they will cost. Consider, however, the immense expenditure of retraining mechanics to take care of these things and the other equipment necessary to maintain electric vehicles; the beefy profit margins that shareholders have been accustomed to for decades; and that as Americans load up these little electric beasts with 14-way adjustable leather seats, 12 air bags and entertainment systems for the kiddies the battery’s range can easily drop from 100 miles to 75 miles. Suddenly, a four-cylinder Honda Civic makes a lot more financial sense.

Still, the mass delusion of electric-car economics marches on…

The founder of Better Place, a former software executive named Shai Agassi, estimates that the projects in Austria and Northern California would require about $1 billion to build.

The Better Place idea gets even loonier when you consider that the company will offer battery swaps at these stations. Better Place claims that in the time it takes for a conventional car to fill a tank of gas, you can change out your dying battery for a fresh one.

For anyone who has had a car serviced lately, you know this is one of the biggest jokes you’ve ever heard. Can you imagine employing a team of professionally trained technicians who can do this? Heck, you can’t even get an oil change in that amount of time at the so-called quick-lube places — and we don’t see any measureable difference in complexity.

(Maybe if the company also had mini-marts on site that sold cigarettes, beef jerky, donuts and soda they could squeeze out a profit.)

Better Place comes along when America’s economic problems may be deeper than anyone suspects.

As Better Place expects folks to pay extra for the privilege of saving the planet, the cost of college is becoming completely out of reach to many Americans – dramatically inhibiting their ability to shell out this green premium.

A new biennial report from the National Center for Public Policy and Higher Education found that college tuition and fees surged 439% from 1982 to 2007, while median family income rose 147%.

Middle-class and low-income Americans may find themselves mired in a cycle of poverty due to escalating prices of higher education. This does not bode well for electric vehicles or charging stations with break-even economics of at least 10 years (or even five years if you want to consider an eventual economy-of-scale from volume production).

Patrick M. Callan, president of the center, was quoted as saying “When we come out of the recession, we’re really going to be in jeopardy, because the educational gap between our work force and the rest of the world will make it very hard to be competitive. Already, we’re one of the few countries where 25- to 34-year-olds are less educated than older workers.”

The report, “Measuring Up 2008,” reached some alarming conclusions.

Among the poorest families the per-year net cost at a public university was 55% of median income, up from 39% in 1999-2000. At community colleges that cost was 49%, up from 40 percent in 1999-2000.

That means a large portion of our population will simply be priced out of the electric car revolution.

If you go to the Better Place web site, they have a social networking section where the Birkenstock crowd crows about all the good work being done by the company. My guess is, however, that many of these people have already paid for their college education.

If we were going to bet on a new generation of fuel-efficient vehicles, we would go with diesel and conventional gas engines. For the time being, electric cars are another manifestation of mass hysteria.