Luckily, I was bearish on oil until recently. I said to short oil when it was at $120 per barrel on 04/23/08. I was a little early to the party, but oil did drop below $33 a barrel in December of 2008. Oil plummeted $114 a barrel after reaching its record high last summer. But, now I think oil has bottomed and will head higher. My fundamental and technical indicators are pointing to higher oil prices. . .Here are just a few reasons why I think oil will run higher:
- There are many potential geopolitical flash points around the world that can flare up at any moment, which could disrupt oil supply
- OPEC plans to meet Sunday in Vienna, and a few of the cartel's leaders have said more production cuts are to be expected
- Crude oil prices held up in the face of new 12-year lows in the stock market last week; this is very bullish for oil
- Oil exploration companies increasingly drilling for oil in harder to reach places, and this adds to the cost of exploration and results in higher oil prices
- Most of the world's cheap oil has already been discovered, and many experts think the world is running out of oil
- Soon we could see demand increase to a level that will start to exceed supply. Demand will grow in the years ahead as India and China continue to modernize.
