techzone12

Oil Is Up Due to Fundamentals, Not Speculation

Last I have heared refineries at the US are not operating at 100% capacity. There will be no efficient alternative to Oil in our life time. Yes demand is up and yes political uncertainties are playing a huge rule. Someone has to ask what was the dramatic change that has happened in the last 5 years.
I can imagine in the near future (before the November elections) that the price of oil would come down. But beyond that it's more likely to creep up. There is high risk in buying now, if you are a short term trader (you can lose yor shirt). However, if you are a long term investor, the chances are that there is a lot of money to be made buy investing in oil stocks.

Oil Price Chart Since 1990

Ok. From the chart someone can conclude that it has to do with the start of the Iraq war. We know that demand is outpacing supply, but this fact didn't change overnight. I have read a lot of articles that said that the price of a barrel will never be able to cross $100.
To me it seems like political uncertainties (more to come) have contributed to the sky-rocketing trend. But for now I am predicting the the price will drop right before the november elections. People have short memory.

Why New Oil Price Highs?

If you do some research, you will realize that Ethanol is a scam. And I won't go into the details. Ethanol related stocks are likely to rise in the short term, but I think will eventually crash very badly.
In my opinion, people are buying commodities stocks in general, becuase they can use them as a hedge against inflation. There is some speculation, but is it a commodities bubble? I don't think so (at least not yet). Oil realted stocks are good looooong term.