Why $100 Oil Could Soon Return

Keith Kohl

Written By Keith Kohl

Posted April 17, 2010

Welcome to Energy and Capital’s weekend edition — our insights in investing, as well as the top stories this week from Energy and Capital and our sister publications.

Whether or not we’re recovering doesn’t matter…

Right now, the idea that we’re recovering continues to fuel higher oil prices.

And we’re all left to wonder if the days of triple-digit oil, damning the petrol gods that be, and flipping off gas station attendants may be returning… amid this recovery.

And They Just Might — Near-term, at Least

Now I’m not talking about the return of $147 oil — not yet anyway. Near-term, we’re only talking about the possibility of a return to $100 (even $110 oil by late May/early June) that will send gas station prices well above $3. It certainly won’t be something to cheer about, but it would only be temporary this year, coinciding with peak summer demand.

Even two big banks are joining that $100-prediction crowd, telling clients to brace for it.

Barclays, for one, expects crude to "flirt with $100 this year," anticipating an average price of about $140 by 2015. I’m sure consumers will love filling up their tanks at prices like those…

Analysts at Bank of America see oil nailing $105 this year. They believe that $150 isn’t far behind — a possible reality by 2014 — thanks in part to increased demand from China and India. China recently overtook the U.S. car market and India has billions of people waiting to buy cars.

Others anticipate that a global economic recovery and tightening refinery supplies will push up prices ahead of U.S. summer driving season. Saudi Aramco, for one, already upped its selling prices for all crude grades for U.S. customers in April.

And then we have a U.S. refinery industry that’s running at 80% capacity recently "in an attempt to drain global supplies and push the price of refined product higher," according to a CNBC report. "As a result, we’re very vulnerable to outages, or like we’re seeing right now with the strike in France, that’s going to spark [this rally]."

So long as there’s recovery speculation, any damp demand will recover — resulting in higher prices and higher demand. And let’s not overlook the potential for conflict around the globe that could flare up at any time, disrupting oil supply. 

So how do you profit from the rise?

Very easily. My colleague, Ian Cooper is now 59 for 61 picks since February 2009. This is your chance to join their success.

Enjoy your weekend,

keith kohl

Keith Kohl

Energy and Capital

P.S. In case you missed some of our top stories this week from Energy and Capital or our sister publications, I’ve included them below:

North Dakota’s Recession-Proof Secret: The #1 Oil Play in the U.S.
Ever wonder how Energy and Capital readers managed to pull off 22 straight winners in a row? A lot of their success is due to one of the hottest new oil plays in North America. In this free report, find out why investors and oil companies alike are flocking to North Dakota.

Becoming Peak Oil Aware: Is the Threat of Peak Oil Back?
Editor Keith Kohl breaks down the upcoming peak oil crisis: The hard truth is that the U.S. production already peaked. If you think peak oil isn’t a problem, you might want to think again.

Simple Oil Facts: Don’t Be One of these Ill-informed Readers
Energy and Capital Editor Nick Hodge shows you that most people are still in the dark when it comes to peak oil.

Real Estate Mogul’s Secret Will Make You Filthy Rich: The Latest Foreclosure Fortunes
Are you prepared for the second leg of the financial crisis? The next wave of foreclosures is about to happen — and it was relatively unheard of just a few months ago. Keep reading to ensure you don’t get caught empty-handed.

Investing in Molybdenum Stocks: The Legend of Masamune
Wealth Daily Editor Luke Burgess explains the origins behind molybdenum, one of least heard of and most important metals today.

The Death of Death: This Unknown American Biotech is Leading the Charge
Without question, disease the world’s #1 killer. Despite that sobering fact, you hardly ever hear about it from the mainstream media. In this free report, learn about one tiny, overlooked American Biotech that could make your portfolio 1,000 times healthier.

Battery Company Stocks: Harnessing Billions in Battery Spending
Wealth Daily‘s editor Nick Hodge tells readers how to profit in the battery sector of the cleantech revolution, including several new plays for investors.

Governments Worried about Peak Oil: But Not Enough to Tell You the Truth
In this second part of a two-part series, Editor Chris Nelder reviews several more recent studies indicating that peak oil is in the near future… 

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