Oil Prices Set for an Extended Run — Here’s How to Play It

Written By Jason Simpkins

Posted March 26, 2024

Oil prices have been somewhat volatile since the end of the pandemic. 

But that’s not necessarily a bad thing. 

It creates a lot of trade opportunities for investors who can snag shares on downturns and then cash out at the peaks.

I’ve been doing it for decades, and these past few years have been especially profitable. 

Better still, it looks like now is a great buying opportunity, as oil prices appear poised to climb for the remainder of the year. 

Take a look…

WTI crude has been trading between $72 and $78 per barrel (roughly) ever since it topped out at $89 per barrel last September.

However, OPEC production cuts, geopolitical risk factors, and stronger-than-expected economic growth have paved the way for a rebound. 

WTI is now back slightly above $80 per share — 20% higher than where it was just two months ago. And the aforementioned factors could further fuel the rally.

The same is true for Brent crude.

It’s already up 12.5% year to date. And now, the Energy Information Administration (EIA) says recent draws on global oil stocks, in concert with OPEC production cuts, will push its price even higher — to an average of $88 per barrel in the second quarter.

That’s a $4.00 per barrel increase over the EIA’s February forecast.

Now, there are a lot of ways to play this. 

For example, I recently recommended Sunoco LP (NYSE: SUN) to our Wealth Advisory subscribers. 

That pick has already returned 5.5% to investors in a little more than a month. 

It’s also a veritable cash machine, as it yields a juicy 5.4% dividend. 

Sunoco is a favorite of mine for a few reasons. 

First, it owns a massive network of gas stations. And those gas stations will become even more profitable as prices rise commensurate with the rebound in crude.

Secondly, Sunoco recently made a major acquisition by taking over NuStar Energy. 

NuStar brings 9,500 miles of pipeline and 63 terminals that transport crude, ammonia, and other refined products.

Those assets will make a fantastic complement to Sunoco’s current business, which previously centered on the transportation, storage, and distribution of gasoline and diesel.

Of course, if you’re looking for something more than a healthy income stream, you should definitely check out the latest report from my friend and colleague Keith Kohl.

Keith runs the Energy Investor newsletter, and nobody knows the market better than him. 

Anyway, he recently found a little-known company that’s revolutionizing the way oil is produced.

Indeed, this company, nestled deep in Texas’ bustling Permian Basin, has developed a new drilling method that’s the biggest breakthrough since fracking.

It’s called the “Horseshoe Well.”

You see, the standard approach to oil drilling is to go straight down and then sideways to reach the oil-rich shale. This is called horizontal drilling.

However, those oil wells typically only cover a 1-mile area, limiting the amount of oil that can be extracted from a specific plot of land.

“Horseshoe Wells,” on the other hand, go straight down, then rotate 180 degrees and go back toward their starting point…

EI Fracking Diagram

This enables operators to tap into an extra mile of shale oil without needing to drill any additional wells.

Essentially, it doubles or even triples oil output from the same piece of land.

It’s like getting a second oil well absolutely free.

It also lowers costs and reduces disruptions to the environment.

That’s how the company behind the technique has cut its drill time in half, doubled its production capacity, and generated cost savings of $10 million.

The firm’s CEO is now reporting record production, with more than 130,000 barrels of oil and gas produced per day.

That makes it a runaway investing candidate for anyone who’s interested in profiting from oil prices. 

So be sure to get all the details on that here.

Fight on,

Jason Simpkins Signature

Jason Simpkins

Simpkins is the founder and editor of Secret Stock Files, an investment service that focuses on companies with assets — tangible resources and products that can hold and appreciate in value. He covers mining companies, energy companies, defense contractors, dividend payers, commodities, staples, legacies and more…

In 2023 he joined The Wealth Advisory team as a defense market analyst where he reviews and recommends new military and government opportunities that come across his radar, especially those that spin-off healthy, growing income streams. For more on Jason, check out his editor’s page.

Be sure to visit our Angel Investment Research channel on YouTube and tune into Jason’s podcasts.

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