Crude oil and metal prices are in the doldrums as the likelihood of a US recession grows. Mayer’s Special Situations editor Chris Mayer says this has commodities stocks at better values than they have been for years.

Slowing growth and inflation problems means the short-term outlook for commodities is not pretty. But over the long term, scarcity of resources is strongly bullish for commodities prices.

This is a great chance to add commodities stocks to you your portfolio and hold for long-term profits.

The US House of Representatives has just passed legislation that lifts the ban on offshore oil drilling. This opens up most of the US coastline to exploration. Individual states now have the option to allow drilling between 50 and 100 miles off their shores. The problem is offshore drilling is unlikely to solve America’s energy crisis. According to the government’s own report, widespread offshore drilling would result in a price reduction of perhaps “two-tenths of one cent 18 years after drilling begins.”

As of today crude oil prices are down 36% from their July peak.

David Fessler says a fall in global demand is temporarily driving crude lower. But population and income growth will restore global demand for energy soon. This means the US will have to compete with emerging giants China and India for supplies.

David says the only long-term solution is to find cheaper alternative energy sources. When Congress realizes this shares in companies such as Clean Energy Fuels Corp (NASDAQ:CLNE) and Vestas Wind Systems (OTC:VWSYF) take off.

There are mixed signals coming from OPEC regarding a possible cut in production, says Jason Simpkins in Money Morning. Yesterday, the cartel announced it would lower output by 520,000 barrels a day to clear up a surplus in the market. But largest member Saudi Arabia – who unilaterally raised output earlier in the year – has indicated that it might not comply. 

“Despite all the advances and promises of the 21st century, we still need those basics,” says Chris Mayer in The Daily Reckoning.

This is worth keeping in mind as commodities prices continue to slide. Just look at oil. Earlier this year, the black goo was touching $150 a barrel. Today, the same barrel of the same stuff is down near $100.

Chris says that, despite oil’s precipitous slide, its long-term prospects are good. Two factors support this bullish outlook. Firstly, demand is surging in China and India. Secondly, this demand has eaten away difficult-to-replace reserves.

Andy Carpenter says US foreign policy is isolating the country from the rest of the oil-producing world. President McCain/Palin will only make this worse. They want the US to return to the 1950s and the Red Scare. Obama, on the other hand, wants to make friends with the world…

Importing the majority of America’s energy needs is not an option for the next president, says energy and oil expert Byron King. Higher capital costs for nuclear and coal-based energy projects relative to wind, solar and geothermal development will favor these ‘green’ technologies. The possibility of caps on carbon emissions will also weigh heavily on the coal industry.

It’s been a volatile year for crude oil prices. After touching above $147 a barrel in July, the black goo is trading back below $110 a barrel.

Don Miller says industry insiders are now betting on triple-digit crude oil prices for the next decade. And long-term oil futures show demand will continue to outstrip supply, as Asia industrializes and proven reserves diminish.

Don says Transocean Inc. (NYSE:RIG), StatoilHydro ASA (NYSE:STO), and Petrobras (NYSE:PZE) are likely to benefit from new drilling projects. And the company that supplies equipment lines for 90% of oilrigs, National Oilwell Varco (NYSE:NOV), is also well placed for profits.

Iran may be part of President Bush’s “axis of evil,” but Taipan Publishing’s Sara Nunnally says it is also a major player in the global commodities market that is now looking to expand its output.

Ambitious new projects to develop the steel and natural gas sectors will dramatically boost production. China and Russia are rushing in to secure supplies. But sanctions prevent the US from investing in Iran.

Sara says ongoing suspicion over Iran’s nuclear program will keep it off the investment table for much of the Western world…

Andrew Gordon is bearish on the long-term growth of cash-rich oil giant Exxon Mobile (NYSE:XOM). Exxon, along with other oil majors, has recently been spending more of its cash on share buybacks than on oil exploration and production. Andrew says this is because all the easy oil has already been discovered.