Since bottoming at $42.05 per barrel June 19, 2017, West Texas Intermediate (WTI) crude oil has been on a tear. Earlier this month, WTI crude oil prices raced above $70.00 a barrel for the first time in more than three years.
Today, we’re bringing you the two best ways to profit from higher oil prices as we head into the summer driving season…
While crude oil prices still fluctuate on a daily basis, they are consistently trending higher, with the 50-day moving average of $67.54 forming a support line.
Urgent: Oil prices could soar to $100 (or higher) ahead of largest IPO ever – click here to see how you could triple your money from oil’s epic rise.
The bullish recovery in the oil market came as a surprise to many media pundits. After all, up until very recently, the pundits were quick to say that the “world was awash with oil.” Supplies were so high that prices could not move higher.
But they were wrong.
Here’s what really happened – and how you can make money from it…
Why Crude Oil Is Rallying
It’s simple supply and demand. Oil stockpiles started to decline about one year ago, according to the U.S. Energy Information Administration. That was just before crude oil prices bottomed.
With supplies tightening and the global economy, led by the United States, starting to pick up steam, the math alone suggests higher prices for oil.
The recent U.S. pullout from the Iranian nuclear deal (JCPOA) also plays a role, albeit a small one, according to Money Morning Global Energy Strategist Dr. Kent Moors. While sanctions against Iran do not resume for months, and the response from Europe, Russia, and China is unclear at best, they still will serve to at least cast some uncertainty on the future supplies of oil.
Traders consider any forward interruption – perceived or actual – in Iranian crude export flow as upward pressure on global prices.
Even the unilateral American sanctions will make it more difficult for Iran to bring its oil to market. They will reintroduce barriers to hard currency, making the financial aspect more difficult. And they will impose penalties on shippers and insurers who continue to work this market.
In short, this will place the United States at odds with Europe, bringing further uncertainty to bear. But again, Dr. Moors thinks this will only be a small factor in the price of oil.
The real problem, he says, is that other major supplies of oil are in danger. From Venezuela to Libya and Nigeria, many OPEC members are facing significant contractions in production. While U.S. production can pick up the slack of an Iranian slowdown, it is not enough to offset the rest.
Yet global demand continues to increase.
This should be enough to keep oil prices on the move higher throughout the summer. And technically, there is little resistance to the advance until about $80 for WTI.
The good part is that it is not too late to get in on this trend to profit.
While oil has been on the move since early 2016, a major shift is currently underway in terms of hard asserts versus paper assets. This relationship is a long-term juggernaut and has favored paper assets – stocks and bonds – since commodities crashed in 2008.
But evidence shows that this tide is turning.
That means crude oil investors are in the right place at the right time.
And we’re here to show you how to bank profits with two of the best plays in the oil market…
Bank Big Profits from Rising Oil Prices
Buying commodities outright is not for everyone. Instead, Dr. Moors has two better ways to profit from the bull market in energy.
The first is actually a double way to play. Regular investors can use two exchange-traded funds that track the price of the two most commonly traded crude oil benchmarks – the United States Oil Fund LP ETF (NYSE Arca: USO) and the United States Brent Oil Fund LP ETF (NYSE Arca: BNO).
Both of these ETFs trade on the New York Stock Exchange, just like regular stocks. You can buy and sell them with the same ease.
Each fund owns futures contracts in their respective markets and takes care of keeping track of expiration dates and keeping its portfolio balanced. When one futures contract expires, it rolls the money over to the next contract month. You don’t have to worry about that at all.
Therefore, owning either gives you full exposure to energy and the ability to profit when these markets move higher.
The second way to cash in on the energy renaissance is Plains All American Pipeline LP (NYSE: PAA). This is a mid-cap oil company that focuses on oil transportation and storage. It controls several of North America’s most prominent pipelines, including the All American and Link Energy pipeline systems.
PAA isn’t burdened with the mega-projects of the oil industry’s giants – there’s no need for the company to shell out billions of dollars looking for the next profitable oil patch.
Instead, PAA simply transports oil from production fields across North America to the Gulf of Mexico, where raw crude is refined and shipped around the globe. It’s a reliable, predictable business model.
And it’s a hugely profitable one.
PAA is already starting to reap the benefit of increasing oil production. From 2016 to 2017, the company increased revenue by 17%.
With such strong tailwinds behind the oil industry, PAA will convert higher oil prices directly into profits, and that gets sent right back to its shareholders.
Analysts are projecting the stock will rise 26% over the next 12 months, and that’s on top of its 5.3% dividend yield, which packs on even more returns.
It’s a company that’s set up to benefit from oil’s short- and long-term boom – a great investment for those investors looking for reliable returns.
And investors have an even more lucrative opportunity ahead of them thanks to the shifting oil market…
How You Could Make a 1,329% Total Windfall from Saudi Arabia’s Brush with Bankruptcy
Saudi Arabia is going bankrupt if it doesn’t act fast. Its budget deficit is the size of Greece’s at the height of the euro crisis.
That’s why the Saudi sheikhs are taking desperate measures – including preparing to sell their national oil company.
But while this $2 trillion IPO will be the largest ever, Dr. Moors just revealed four backdoor plays that could make you a total 1,329% before the IPO even happens.
Click here to see the full interview.
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