[T.S.R:16745] Sean Brodrick: Oil Could Hit $130/bbl in 12-18 months

This year, we're going to hit an important milestone. This is the year when the world is going to start using oil at a rate of more than 1,000 barrels PER SECOND. 

According to the International Energy Agency, global oil demand will average 88.2 million barrels per day (bpd) in 2011, up from 86.9 million bpd in 2010. At 88.2 million bpd, the world will use 1,026 barrels per second — a sonic boom of energy use. Keep that in mind — and hang on to your hat — as I tell you more news:

• The president of Excel Futures says that the price of crude is going as high as $120 to $130 by July. "More and more people are coming out and saying that. It's inevitable," Mark Waggoner told the Wall Street Journal.
  
  
• U.S. crude inventories have fallen by more than 20 million barrels in a recent 1-month period. This is adding more upward pressure on oil prices.
  
  
• The price of oil rose 26.5% in 2010. But OPEC, which produces about 40% of the world's oil and natural-gas liquids, refuses to change production quotas that have been in place since January 2009. And leading OPEC members say that they expect to see 100 dollar oil "very soon."
  
  
• If anything, OPEC's production is going in the wrong direction! 10 of the cartel's 12 countries will produce LESS oil in 2011 than they did in 2008, with Iraq and Nigeria the only countries expected to see production increases. This is on top of the 2.4% drop in global oil production we saw in 2009.
  
  
• Chinese oil demand is shifting into overdrive, driven by that country's growing love affair with the automobile. In the first 10 months of 2010, China's auto sales exploded by 34.5% to reach 14.6 million vehicles. Annual total sales may reach about 18 million units. 700 out of every 1,000 people in the U.S. and 500 out of every 1,000 in Europe own cars today. In China, only 30 out of 1,000 own cars — but Dr. Fatih Birol of the International Energy Agency says that figure could grow by NINE HUNDRED PERCENT in less than 25 years!

In fact, demand for oil from China and India, another amazing growth story, is expected to raise global oil demand another 1.3 million barrels in 2011 and push global oil demand to 92 million barrels a day by 2015.  

Where is that new oil going to come from? Heck, where is the new oil going to come from this year, as a thirsty world gulps down 1,000 barrels of nonrenewable fossil fuels EVERY SECOND?! No matter what, you need to prepare yourself. The world is on a collision course with a new oil shock that will make the run to $147 a barrel we saw three years ago look like a speed bump.

It won't be a straight road — I expect plenty of zig-zags. But you can potentially profit with investments that will cushion you against higher oil prices and help pile up mountains of cash in this new energy crisis. These are some of the facts that keep me awake at night ... 

America Is Careening Toward a New Energy Crisis

• America is the world's largest consumer of oil, guzzling more than 7.1 billion barrels per year. We import more than half the oil we use, and that amount is rising, which is why America is described as "addicted to oil."
  
  
• More than 81% of the world's discovered and useable oil reserves come from just 10 countries. Most of them don't like us much. And 30% of the world's oil is in three countries — Iraq, Kuwait and Saudi Arabia. Saudi Arabia, home to 15 of the 19 9/11 hijackers and a major source of funds for Islamic terrorists, is the world's "Central Bank of Oil."
  
  
• The world consumes 173 billion barrels of oil — about 14 Prudhoe Bays — every 2.4 years. At the same time, we find enough new oil to supply just 3% of that.
  
  
• Just to keep prices stable, in the next decade, we're going to have to find a couple more fields the size of Ghawar — the biggest oil field in Saudi Arabia ... and the world.

In fact, much of what we're seeing oil prices do now is simply the continuation of a major upward trend that was interrupted by the financial crash of 2008. 

The global economy is recovering — expected to grow 4.2% this year — and oil demand and prices are surging again. Higher crude oil prices mean higher prices at the gas pump. But they also mean higher prices at the supermarket, because farmers' fuel costs and transportation costs go higher.

In other words, millions of average American families that are already being stretched to the limit are about to be stretched even more. 

Sure, oil is already on the move. But the coming surge could be much bigger. And it could happen so fast and furious that Wall Street's common-wisdom crowd — the same folks who have been predicting oil would tumble to $20 "any day now" — will be left in the dust. 

The fact is, powerful forces are lining up that could trigger parabolic moves in select oil stocks in the next 12 to 18 months
 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

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