So You Didn’t Buy Oil When It Was $66.05 a Barrel? Here’s What You Do
Try to think where you were exactly one year ago.
Perhaps you were caught up in the red-hot tech boom that had been raging for more than a decade. Watching the Nasdaq climb 385% between May 2012 and May 2021 would’ve been quite fruitful for your portfolio.
Little did you know that the crash was about to begin just six months later.
What didn’t pique your interest was the fact that WTI oil was trading for $66.07 per barrel on May 25, 2021.
When was it that you realized oil was ready to burst higher?
So tell me — do you feel late to the party?
Well, you’re not alone.
Far too many investors have been burned when oil prices have run above $100 per barrel in the past.
Too many of them saw the hype from previous oil booms, bought hand over fist at the tippy top, and then wept as their portfolios slid down the backside of the oil cycle, hitting every bump on the way down until the bears were fully in control.
It’s a song as old as Standard Oil itself.
But there’s a silver lining here, because despite being deep in triple-digit territory, we haven’t hit the top of this boom.
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I know what you’re thinking.
Now that crude oil is trading around $110 per barrel again, why on Earth would we not see this as the top?
Well, the mere fact that we’re barreling into Memorial Day weekend with gasoline prices at the highest point they’ve ever been should make you wildly bullish.
Of course, heading into the summer driving season with U.S. stockpiles of gasoline well below the five-year average is just the cherry on top.
Take a look for yourself:
Look, you and I both know all too well that not every stock is created equal.
This is especially true for the oil sector.
Typically, the cure for higher oil prices is higher oil prices.
Higher prices would normally cause drillers to flood cash into their operations and extract as much crude as humanly possible. Naturally, the higher gasoline prices that follow would erode demand. Once demand destruction occurs, it wouldn’t be long before prices crash and drillers pull back the throttle.
This summer, however, there are a number of factors elevating oil prices, including the geopolitical volatility from the Russia-Ukraine war.
At the same time, U.S. drillers still haven’t caught up to pre-pandemic production levels of around 13 million barrels per day.
They still have another million barrels per day to make up.
Meanwhile, demand for petroleum products last week was just shy of where it was in 2019.
Truth is, you aren’t late to the party.
In fact, it’s just about to start for a small group of stocks within the oil industry that not only outperform the rest of the sector when oil prices are high but actually thrive!
Next week, we’ll drill down into one of the most profitable stocks to own right now.
Until next time,
A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing's Energy Investor and Technology and Opportunity.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.
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