These days, we are bombarded by stories and messages of alternative power sources that are quite literally revolutionizing the way we live and work. Technologies that harness the power of the sun and wind are clearly the next step in energy production. However make no mistake, the world is still saturated with oil and petroleum products, and they aren’t going anywhere, at least not in the near future. According to several reputable experts, the total demand for oil will reach its peak between the years 2023-2025, with a noticeable decline towards the year 2035. Thus there are still many windows of opportunity to invest in oil, and now may be one of the best times yet.
The United States is one of the world’s largest oil producers and consumers, yet in the past 40 years, American energy policy has been based on banning domestic oil exports in a protectionist effort. Luckily enough, this ban was lifted under the Obama administration, and oil production and US oil exports have been growing steadily since then. Although OPEC still dominates much of the market, the Permian Basin in the Southern US is the second largest deposit of oil in the world behind Saudi Arabia’s Ghawar Field, and it is gushing with lighter and cheaper oil. On top of this, American production is more stable than OPEC’s, which makes it that much more desirable. But don’t take our word for it, countries like China, South Korea, India, and even Venezuela have already recognized this and have been gladly buying.
To sum it up, the U.S. has a massive supply of oil, and is all set to export it to countries who are more than happy to buy. As of now, oil is cheap, and is likely to get even cheaper, so there is room to sell for the short term investor. However for the ones that like to play the long game, I suggest you keep your eye on the USO ticker, and watch for a break in resistance.
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