Friday , 19 April 2024

Why Oil is Headed To $300 – Yes, $300! (+2K Views)

The price of oil is headed “unimaginably higher” in the next few years – to somewhere north of $300 a barrel – because of two very simple forces … Words: 708

So says Larry Edelson ( in an article* entitled “Headed Unimaginably Higher!”. Below Lorimer Wilson, editor of, presents further reformatted and edited [..] excerpts from the article for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article reposting to avoid copyright infringement.) Edelson goes on to say:

[As I said] the price of oil is headed “unimaginably higher” in the next few years – to somewhere north of $300 a barrel – because of two very simple forces, namely:

1. The Inevitable Demise of the U.S. dollar
Make no mistake about it: Despite an occasional rally in the dollar, the greenback is utterly destined to lose at least half its current purchasing power in the next two to three years, if not more – and then even lose its status as the world’s reserve currency! The reasons are varied but all you have to do is understand that the Federal Reserve stands ready, willing, and able to print unlimited amounts of paper money to pump up the U.S. and global economy, and that it will not hesitate to do so.

2.The Inevitable Rise of China
At its current rate of economic growth, which is NOT going to slow substantially anytime soon, China’s economy will overtake the U.S. economy in less than 10 years – and one of the ways China’s growth is showing up is, naturally, in energy demand. In fact, according to the International Energy Agency (IEA), in 2009 China officially overtook the U.S. as the world’s top energy user, far faster than expected, and in spite of the global financial crisis.

Indeed, China is still in the early stages of its energy consumption growth. In terms of total energy usage on a per capita basis, U.S. consumes 11.4 kW per person per day, while China consumes only 1.6 kW. In other words, China consumes one-seventh of the amount of energy the U.S. consumes on a per capita basis — and China is already the world’s biggest consumer of energy. As China’s economic growth continues and hundreds of millions more people are lifted out of poverty, it’s not too hard to see how the country’s need for all forms of energy is going to explode higher – or how that demand could easily push the price of oil “unimaginably higher” in the years ahead.

Oil as an Investment
Oil is one of the very best investments you can make in your portfolio for the long haul no matter what the economy or stock markets do shorter-term. This is also why I expect a huge wave of mergers and acquisitions in the energy sector in the months and years ahead.

Huge and burgeoning Asian demand for energy and energy services that will generate surging revenues plus the sliding value of the U.S. dollar will mean loads of companies will also want to put their money to work in the energy sector – but not at the expense of any of your gold investments, mind you. Don’t listen to all those pundits out there who are telling you to get out of Asian, and especially Chinese-based investments. They’ve been wrong time after time about Asia and China, and they are going to be dead wrong again.

Asia and China, in addition to gold and oil, represent your keys to wealth in the months and years ahead.

* (Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. To view archives or subscribe, visit their web site.)