Winners and Losers of $100 Oil
Get ready for an expensive summer...
The price of oil is still powering higher. Crude prices have increased over 15% since the beginning of April. And it seems there's nothing to slow down oil's march back to $100 per barrel.
That's probably going to mean the cost of everything will be going up.
Gas prices are already expected to break record highs this summer. The nationwide average for gas is already approaching $3 per gallon. MarketWatch reported last week that Americans spent $4.4 billion more on fuel for their vehicles last month than they did in April 2017.
But it's not just fuel. Rising energy costs will also likely mean increases in grocery prices, electricity bills, restaurant costs... a lot of things are probably going to be pricier this summer.
The consumer (you and me) is going to get squeezed. But the sharp uptick in energy prices is exactly what we as investors have been waiting for.
The biggest winners with crude back over $100 a barrel will be the major oil-producing nations, of course. Fact is, it's these guys who are mainly responsible for the recent upturn in prices.
Back in 2017, OPEC, Russia, and other major oil-producing countries got together and collaborated to begin cutting crude exports in a bid to increase prices.
The International Energy Agency's (IEA) most recent report on oil inventory shows that levels are at a three-year low, helping push crude higher over the past several weeks. Brent crude oil just broke $80 per barrel last week before pulling back.
But these guys have a bigger, longer-term plan.
See, Saudi Arabia is going to take 5% of Saudi Aramco, the nation's state-owned oil giant, public later this year. And it wants oil prices as high as possible going into that IPO.
The planned sale is expected to raise between $1 and $2 trillion. It will be the biggest IPO in history. And it will automatically position Saudi Aramco as the largest publicly traded company in the world.
All in all, everything is working out well for them so far. And at the end of the day OPEC, Russia, and other collaborators will no doubt be the biggest winners with oil at $100.
Of course, that means there are going to be losers. Someone has to pay. And unfortunately, the biggest losers are generally going to be consumers like you and me. As I mentioned, rising energy costs can drive up the cost of anything.
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And that's going to be an expensive summer for most people. But not all...
Energy investors are set for one of the most exciting summers in years.
Pure Energy Trader editor Keith Kohl tells me, “This could be the most important summer for energy since 2008. Oil prices are going to not only reach $100 per barrel, they're going to blow it. My readers are prepared.”
We here at Energy and Capital have been focused on energy for years.
Because without energy, there is simply nothing. Nothing happens without energy. It's the very foundation of necessity for everything that happens.
Right now, there's a huge window of opportunity to buy oil “cheap” that's quickly closing. Investors should be heavily focused on energy. Major forces are continuing to push the price of oil higher.
Whether you choose a safe energy-focused mutual fund or take a chance on a bigger return with a smaller energy play, you're going to want at least some energy investment exposure now.
Until next time,
Contributing Editor, Park Avenue Digest
As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bubble and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.
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