January 12, 2011 - Storm Clouds are Gathering for Oil

Featured Trades: (ALASKA OIL SPILL), (DIG)

3) Storm Clouds are Gathering for Oil. Spill six barrels of oil in a remote basement in Northern Alaska, and all of a sudden, 15% of the US oil supply is cut off. That was the response of officials at the Trans Alaska Pipeline over the weekend, no doubt hyper sensitized to accidents in the wake of last year's Gulf oil disaster. BP happens to be the largest shareholder in the line. Does anyone see a coincidence?

The 640,000 barrels a day we get from the home of Sarah Palin, dog sleds, and moose sausage is expected to start flowing again soon. But the event does underscore the fragility of our energy supplies. This is why I think we are going to $110 to $120 sometime this year, and $300 within this decade. The $5 a gallon gasoline this assures explains why I will soon take delivery of a black, all electric Nissan Leaf with a solar roof panel. It is also why my newly enriched Macro Millionaires own the 200% leveraged oil major basket ETF, (DIG), in their trading book, which hit a new all time high today. If you need further convincing about the short, medium, and long term case for oil, take a look at the chart below.

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.