Crude oil forecasts for $150 to $200 oil aside, the Energy Department believes oil prices will fall to $70 a barrel in the next seven years, as production begins in Azerbaijan, Canada, Brazil and Kazakhstan.

But a $70 scenario assumes that OPEC producers will maintain their 40% market share of global oil supply, with plans to invest in additional production.

And from $70, oil is expected to jump to $113 a barrel by 2030, as the market remains "relatively tight," they said. That's a 92% revision from last year's "$59 by 2030" forecast.

But even $113 may be off, as the issue of supply vs. demand force prices higher. It's not speculation sending oil higher.

Even Buffett agrees that it's a supply and demand issue, and not speculation.

"In my lifetime, up until the last year or two, there's been a huge amount of excess supply available," he said. "We don't have excess capacity in the world anymore, and that's why you're seeing these oil prices."

Couple that with news that world energy consumption will rise 50% between 2005 and 2030, as demand in developing countries rises 85% and oil "worst case" scenarios become plausible.

Other Oil Issues...

The weak dollar isn't helping, and neither are OPEC comments that oil could reach $170 this year on currency and geopolitical risks. A falling U.S. dollar makes goods priced in dollars cheaper for foreign buyers, resulting in higher demand.

Threats against Iran over nuclear projects aren't doing much to help. There's a growing fear that in the event of war with Iran, the Strait of Hormuz (passageway for 90% of oil exported from Gulf producers) would be jeopardized. If that happens, we'd see an immediate oil super-spike.

And then there's Libya, which is threatening to reduce production. According to Bloomberg, Shokri Ghanem, chairman of Libya's National Oil Corporation said reductions may be made because of an over-supplied oil market, and in response to Iranian sanctions.

So how do you profit from it?

You buy domestic crude oil and alternative energy companies. Oil is going higher. Nothing is stopping the rise. The dollar is weakening. And inflationary pressures remain tight.

Making these companies even more attractive are the oil and gas discoveries and the fact that domestic explorations are more appealing given geopolitical tension.

Even the President agrees.

"Our problem in America gets solved when we aggressively go for domestic exploration," Bush said.

To protect your portfolio from higher oil cost, diversify with domestic and alternative energy companies, like Royale Energy (ROYL), Marathon Oil (MRO), SandRidge (SD) and the many stocks recommended in Pure Energy Trader, The $20 Trillion Report, and GreenChipStocks.com.

Good Investing,

Ian L. Cooper

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In case you missed our other investment opportunity highlights, here's what we covered in Wealth Daily, Gold World, Energy and Capital, and your free blogs for the week of June 23, 2008.

Platinum Mining Companies: Zimbabwe Set For a New $400 Million Platinum Mine
Platinum is extremely rare, occurring at only 0.003 parts per billion in the Earth's crust. This makes the most precious of all precious metals about 30 times rarer than gold. In fact, it's so rare that if all the platinum in the world was poured into one Olympic-size swimming pool it would scarcely be deep enough to cover your ankles.

The Big Picture on Q2 2008, Part 2: Commodities and Renewables Charge While Market Tanks
In part 1 of this series, we reviewed the trends in financials, fossil fuels and electricity. This week, we take a look at renewables, food and fertilizer.

Brazilian Ethanol: The Break-Out Brazilian Energy Play
Brazilian sugar refiners are ready to satisfy America's energy sweet tooth. Here's what I mean, and why the Brazilian ethanol recommendation noted below is about to explode.

Investing In Safaricom: The Coming African Stock Boom
Nigeria is mired in oil turmoil, and Zimbabwe's elections just turned bloody again. But regional growth is at 30-year highs and has room to run. That's why today I'm telling you to buy Africa. Across Africa, outbursts and opportunities pose huge potential for risk and reward to the international investors swarming in. Here's how you can make money in African investments.

Investing in Wind Energy: How to Own 52 Wind Stocks for $30
As oil prices stay high, the wind power and alternative energy themes are becoming increasingly popular, making the latest ETF issue even more enticing at $30.

Investing in Electric Vehicles: The DIY Strategy for Energy Price Hedging
If you think $4 at the pump is bad, just wait. It's not getting better anytime soon. By now, we've heard all the reasons for escalating prices: rising demand in India and China, a falling dollar, speculative trading and many others.

Microsoft-Yahoo Deal Back On?: Don't get too excited, though.
TechCrunch is reporting that Yahoo and Microsoft talks are back on. "The information we have is thin, but what one source is saying that Microsoft is talking a price lower than the $33 they were offering when the talks disintegrated in May," the report said.

When Will the Credit Crisis End?: Peak by Q1 2009, says Goldman Sachs
The credit crisis will not peak until the first quarter of 2009, said Goldman Sachs. And, according to the latest Goldman forecast, global financials will need to raise another $65 billion by this time next year to deal with losses.

Dow Does it Again...Tack on Another 25%: Chemical Giant Hikes Prices for a Second Time
The last time I wrote about Liveris was less than a month ago, when he decided that his company had no other choice but to raise prices 20% across the board. His input costs (read the price of oil), he complained had simply become too high crushing his margins.

El Paso Calls Heating Up: Why it's still a buy...
You may want to keep El Paso (EP) on radar. The El Paso August 2008 23 calls are seeing interest with 7,986 call contracts trading hands versus open interest of 69. The spike is being attributed to news that the company has expanded land holdings in the Haynesville shale area. While the stock has since retreated on the comments made at the Wachovia Nantucket Equity Conference, it and the call options are a buy.

How to Protect for Downside
This rally won't last, we said June 12. Bank earnings are next week. The world is on the edge of severe crises. Israel and Iran are ready to fight. Oil is heading up. Gas is skyrocketing. Thousands of homes are in foreclosures. Global banks are struggling. Home equity loans are the new subprime fiasco. Unemployment is rising. Food riots are daily. Bond insurers are losing ratings. Oh, and then there are the hundreds of trillions in derivatives.

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