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$1 Gas Prices

The Buying Opportunity of a Lifetime

By Ian Cooper
Friday, April 13th, 2012

I remember when it cost me ten bucks to fill up my car.

It was 1998...

I could drive to and from the ocean on a tank of gas and still have enough money left over for a dozen crabs and some beer.

Nowadays, I'm lucky to manage the round-trip drive to the shore for under $50 — just for fuel and tolls.

But for a few lucky drivers in Pasadena, Texas, it was like 1998 all over again this past week when a computer glitch at a Conoco station resulted in $1 gas prices.

“After word of the mishap spread on Facebook, so many people were scrambling to get the low-price gas, police were sent to the station,” an area news station reported.

One woman tells reports she was able to fill up two cars and two Expeditions for only $57.  

Another said: “I pumped my gas. I got it for ten dollars. Ten dollars to fill up my whole tank.”

But the price pullback didn't last long...

Same goes for the pullback we've seen in global oil prices.

Oil may have pulled back nicely, but downside is limited — and our sights remain set on $115/barrel by summer on geopolitical concerns.

crude oil chart 041112

When it comes to the situation with Iran, things are not likely to end well.

There's no "quick fix" here.

The only real way to fix this is through negotiations over time — not in a weekend of talks.

We're not going to halt Iranian enrichment and remove their stockpile of 20 percent enriched uranium in two days' time.

Iranian President Ahmadinejad has already told us his country can withstand a boycott of Iranian oil exports for two years. That by itself doesn't instill much confidence that negotiations will end well.

It's not like he's just going to abandon their nuclear program.

Israel's defense minister is expressing doubts that sanctions will force Iran to back down.

National security officials and experts say there won't be a deal.

All these things point to one thing...

War with Iran will send the price of oil much higher.

Analysts are already speculating...

"An Iranian disruption of oil supplies could send oil prices to $200 a barrel," said Lynn Reaser, chief economist at the Fermanian Business & Economic Institute.

"It's something we're really concerned about," said Chris Lafakis, an economist at Moody's Analytics. "A military confrontation could push prices to $180 a barrel, which would precipitate a recession."

How to Trade It

For all these reasons and more, we remain bullish on cheap Bakken-related oil stocks.

Geopolitical rumblings are setting the stage for a big event — and a promising investment opportunity in the Bakken.

From what Keith Kohl is telling me, there are still cheap, undervalued Bakken stocks to be had.

You'll want to position yourself in domestic companies before our oil supply becomes further tangled in affairs in the Middle East.

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Ian Cooper

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Ian Cooper has been trading stocks and options for 12 years. He contributes options, stock, and energy commentary to Wealth Daily, Wealth Wire, and Options Trading Pit. He's the Coach behind Options Trading Coach, a beginner's guide on how to trade options. Ian teaches thousands of loyal subscribers the many ways to be profitable from options rather than simply buying stocks alone. For more about Ian, take look at his editor's page.


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