Geo-political tensions are mounting in the global energy game. And that could make investing in oil right now the trade of the year, says Manraaj Singh. Buying shares of oil majors is a good move now. But Manraaj says quality mid-sized oil companies are best placed to return big profits in the next oil bull run.
Crude oil prices will likely remain low in the short term. Supply cuts will not keep pace with demand destruction in the near future. And that could send gas prices below $1 a gallon by Easter, says David Fessler. He gives two ways investors can turn their savings at the pump into big profits.
Crude oil prices slipped below $60 a barrel yesterday, taking the black goo to a 20-month low. But that doesn’t change the fundamentals. Oil production is levelling out, and will soon begin to fall. Andrew Gordon expects crude to soar back toward $200 after a short pause. And Big Oil companies that are still investing in new projects will shine.
Crude oil is now worth less than half its July value. But as central banks and consumers rejoice, socialist oil-exporters like Russia and Venezuela are in “dire straits”. Justice Litle says desperate times could prompt desperate measures from the firebrand leaders of these countries. And this “geopolitical time bomb” could send crude skyrocketing once again.
There are great wealth-creating opportunities in today’s miserable markets, says Andrew Snyder. Take oil, for example. The black goo is on a slippery slope towards $50 a barrel, and no OPEC production cuts are going to stop this in the short term. Andrew says the UltraShort Oil and Gas ProShares ETF (AMEX:DUG) is the best way to profit from the oil industry’s downturn.
Oil was given a lift yesterday. But at $81.19 a barrel, the black goo is still almost $70 from its July peak.
Greg Guenthner isn’t sweating it.
Oil prices have been caught up in widespread panic selling of recent months. It remains a scarce and essential commodity. This means it is only heading in one direction over the long term.
Greg recommends following oil guru Richard Rainwater’s cue and buying into oil stocks with both hands.
US Energy Secretary Samuel Bodman says the America’s “nuclear renaissance” could be derailed by the credit crisis.
But Smart Commodities UK editor Garry White says a number of nuclear power projects are already underway in other parts of the world. India plans to build between 18 to 20 new nuclear plants over the next 15 years. Even the Middle East is shifting to the atom for its future energy needs.
Nuclear plants are also proven to be effective at water desalination. This will be vital in emerging markets, where populations are rising rapidly.
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.
Editor’s Note: No market divides analysts as much as oil right now. Are record prices the result of speculators or a fundamental imbalance in demand and supply? Is the bubble about to burst or can oil prices climb further?
Editor’s Note: The debate over why crude oil prices keep on setting new records rages on. The Daily Reckoning’s energy expert Dave Gonigam thinks the blame game that’s going on in the oil market detracts from the real issue at hand. The world’s supply of oil simply can’t keep up with demand.