It has been a hot minute since commodities were so… well, hot.
In fact, it was about 8 years ago that we saw a little run on oil – but as high-growth stocks started outpacing asset-based stocks – commodities, especially oil, seemed to get lost in the dust.
However, that was 8 years ago…
We’re in 2022 (I can’t believe how fast time is moving) – and commodities look to be on another tear as inflation grips the world’s economy and Russia tries to bring Ukraine under its heel.
Oil is moving…
And while we’re paying for that surge at the gas pump – it doesn’t mean that there isn’t opportunities for investors to come out of this thing on the other side with a little more coin their pocket.
Like I said, oil is moving…
But where will it stop?
Have we come close to the peak yet?
Will we see $200 per barrel oil prices?
That’s the $68,000 question right?
Can oil, which seems to be on an unprecedented run – shoot right on past $150 – and go all the way to $200?
But man, we’ve had a good run, haven’t we?
I mean, when you really think about the fact that a finite resource like oil has been kept at such a low price for so long, I think we’ve done pretty well considering, don’t you?
Sure, we’ve had a few price spikes here and there.
The oil crisis of the late 70’s… a few issues during Desert Storm… then again during the War on Terror… and once more toward the end of Obama’s presidency…
But all in all, we should consider ourselves lucky. When you look at the price index changes over that time, how we were able to keep oil so affordable for so long is something of an economic miracle.
That said, over the years, America has done great for itself in the energy department.
The advent of fracking pushed America to the front of the line, and in 2015, we became not only energy-independent but also the world’s biggest producer of oil in the process.
A whopping 20% of the world’s oil comes from the United States. That’s crazy to think about given that just a few years ago where we were forced to import oil from foreign (and sometimes hostile) sources.
Oil has seen a steady climb over the past two years, but in the past few months, oil has gone on a run.
Of course, Vladimir Putin’s globally condemned attack on Ukraine has only exacerbated things, making the problems as global as the condemnation.
Today, at the moment of this writing, the price per barrel of crude is hovering around $110 – but just a few days prior – that price was hovering around $120 and spikes going all the way up to $130.
And with prices at the pump over $4-$5 almost EVERYWHERE in the US right now, people are starting to wonder just how high the crude prices may go.
Is $150 the ceiling? $175?
Or is it possible that we could see $200 per barrel crude prices?
Well, it comes down to the same thing that all prices come down to: supply and demand.
When it comes to this equation, the supply side isn’t really looking too good – even before any official sanctions were levied against Russia – the market had already been in the process of shunning oil from Putin’s homeland.
But while Russia’s oil is a part of the problem, it’s not enough to fix the supply issues.
Of course, any (or all) of the other major oil-producing countries could bump up production, but that’s not likely to happen. These countries are enjoying the profits they’re making with soaring prices.
If they were to bump up production, really only Saudi Arabia and the UAE could actually make a difference to meet today’s current demand….
However, even if these two oil powerhouses DID increase production, it would greatly deplete what’s left of the global market’s spare capacity, which would only push crude prices even higher until a more permanent solution is found.
So, with OPEC out, Russia out, and Venezuela out… the only country left to alleviate the demand burden is the US.
Even if President Joe Biden rescinded his moratorium on fracking on federal land, it would most likely take at least TWO quarters for production to make a dent in current oil prices.
So, taking all this information into consideration, it is a very real possibility that oil could hit the $200 mark before the end of the year.
That’s why investors should be looking at this as an opportunity.
I’ve been seeing more energy companies hitting all the right aspects of the GorillaTrades trading matrix – and we could see ven more of them pop up as recommendations…
Which is why I’m urging you to consider subscribing to GorillaTrades today – before the next round of picks comes out – because believe me, you’re not going to want to sit this one out.
Because the truth is…
The possibility of $200 per barrel oil is a very real one – and it may be a smart idea to hedge the money you’re spending at the pump with profits you make in the market!
“Before anything else, preparation is the key to success.” – Alexander Graham Bell