Are You Finally Bullish On Oil Prices Today?

Are you finally bullish on oil prices today?

If you liked oil at $80 per barrel, then you’re going to love oil when it creeps above $90 per barrel this summer. I know most of the market wasn’t expecting oil prices to climb so high so soon. 

We’re hardly into spring and oil’s momentum hasn’t slowed since the beginning of the year: A barrel of WTI crude is threatening to hit $86 per barrel as I write this now; a barrel of Brent crude is trading for $89.77. 

That means that WTI prices have risen 22% since the beginning of the year:

Still, longtime readers aren’t shocked by this move, and know well that our outlook for oil hasn’t changed. It’s simple, really. For us, a two-headed bull has emerged that has buoyed oil markets during a period when prices SHOULD BE at their weakest point. 

It comes down to a few unshakable catalysts which the market can no longer ignore:

• The growing delusion over future global demand projections. 
• A period of intense geopolitical volatility that has increased in 2024.
• Fear over tighter supply as OPEC+ regains its dominance over global oil flows.

And the market is finally waking up to these realities — just in time for peak summer demand. 

Today’s Market is Finally Bullish On Oil Prices 

My colleague, Jeff Siegel, hit the nail on the head earlier this week when he told you that the recent attacks on Russian oil refineries was going to lead to higher oil prices. Truth is, the Russo-Ukrainian war has entered an extremely volatile period as each side aggressively goes after the others’ energy infrastructure. 

But we’re talking about more than J.P. Morgan making its millionth prediction that oil prices are going to $100 per barrel. 

While it’s good to see Wall Street finally waking up and getting bullish on oil, these price projections are going to move higher and higher the closer we get to summer… just watch. 

After all, last year we saw the outlandish oil predictions from Goldman Sachs calling for $140 oil, or Russia’s former President suggesting that oil prices would surge to $400 per barrel if a price cap was put on Russian oil. 

Ignore the clickbait headlines like that, because you and I both know that we don’t need $200 oil to turn a profit. In fact, we WANT oil to trade in a stable range — right where it’s at currently. This not only ensures a healthy profit for the companies extracting our crude from underground, but it’s difficult for some investors to grasp the idea that egregiously high oil prices will cause more instability and lead to lower prices. 

Remember, the cure for higher oil prices is high oil prices. When crude prices are elevated, it spurs drilling and leads to higher supply, which in turn will put downward pressure on prices. 

Given the fact U.S. oil production isn’t going to experience much more growth this year from its current levels, the power dynamics have shifted to OPEC+, which has taken control of the world’s oil markets once again. 

But that doesn’t mean my readers weren’t ready for it.

The Easiest Investments I’ve Made Preparing for an Oil Price Rally

Last summer, I told you about an oil stock in the Permian Basin — Diamondback Energy — trading at attractive levels that would not only beat Warren Buffett’s oil bet on Occidental Petroleum, but outperform most operators in the sector. 

If you recall, Warren Buffett famously doubled-down on oil after increasing Berkshire’s stake in Occidental Petroleum to more than 25% — a position worth nearly $13 billion!. 

Since I wrote that back in early July, Buffett hasn’t done too poorly. Occidental shares have grown roughly 15% since then. 

That’s not too shabby, until you take a peek at how Diamondback performed during the same period:

That’s one of the easiest 52% gains my readers have booked to date. 

The energy sector has been one of the biggest drivers in the market today. Even Morgan Stanley was forced to admit that after it upgraded energy stocks to overweight recently. 

However, for U.S. oil stocks that are facing both a hostile Biden administration and a ceiling for output growth this year, the name of the game isn’t about drilling their wells at a feverish pace anymore.

HOW you drill and complete your wells are far more important than how many wells you drill. 

Today it all comes down to boosting efficiency. 

In some areas, we’ve seen some of the best Permian players in the field today develop incredible new well designs that increase output and reduce costs.   

And then we have Diamondback Energy, a company that’s now looking into nuclear energy and deploying small modular reactors to power its future drilling operations. 

Of course, you and I both know that SMR technology is already starting to gain traction outside the U.S., and it’s only a matter of time before it starts gaining traction here. 

But here’s the catch… it’s not about who’s building this next-gen nuclear tech, it’s all going to come down to who is fueling them.

Until next time,

Keith Kohl

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A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.

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