We’re hearing a lot of noise about oil production being at record highs and low gas prices, but I’m seeing some conflicting data from where I sit because my ‘Wealth from Power’ service, which is packed with high-flying oil stocks, is doing very well.
So let’s see if we can sift through all the clutter and look into the future of oil prices and how we might profit…
Here’s the picture that’s causing all the headlines- United States Oil, a proxy for the price of oil:
As you can see, things have certainly been better. The price is below average (curvy blue line), but it’s not exactly a crash, is it?
And by contrast, here’s the chart of the people who make money from the sale of oil, the oil explorers and producers (XOP):
The oil companies are doing well- as you can see, the trend is squarely UP. So which chart is wrong? Is oil too cheap or are the producers too expensive?
To my eye, this is a temporary situation for the price of oil as it goes through another down-cycle. Oil prices are headed steadily upwards, and stock prices of the oil producers agree with this. But this has also created some great buying opportunities in the oil space, and subscribers to my ‘Wealth from Power’ service are getting ready to profit.
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