One analyst is predicting oil prices could skyrocket to $400 a barrel by 2020. The only thing more surprising than the price target is the reason why…
Dr. Philip Verleger, a famed economist studying the oil markets, says a regulation from the International Maritime Organization (IMO) has the potential to create a global recession even worse than the Great Recession.
And while we can’t be certain Verleger’s oil price prediction is 100% accurate, this regulation will almost certainly drive up the price of oil…
Why Oil Prices Are Only Going Higher
The IMO now requires all oceangoing ships to burn low-sulfur fuels by 2020, and there simply won’t be enough low-sulfur fuel to meet that demand.
Currently, two-thirds of the crude oil produced worldwide fails to pass the IMO’s test, and according to Verleger, half of the world’s refineries can’t produce low-sulfur fuel right now.
Once the regulations hit, it’s simply a matter of economics: Rising demand combined with lower supply means prices for low-sulfur oil will rocket higher.
And low-sulfur oils like West Texas Intermediate and Brent Crude are precisely the oil variants that will see the massive price surges.
Verleger isn’t the only one raising the alarm…
Morgan Stanley predicts the IMO regulations will spike demand by 1.5 million barrels per day, sending oil prices to $90 a barrel in 2020.
The International Energy Agency (IEA) says the IMO regulation is “one of the biggest and most pressing issues” in its latest oil forecast. In fact, it called the effect of the regulations a “major uncertainty” in its forecast.
Oil prices could surge anywhere from 30% to 488% higher in 2018, enough to send the global economy into a tailspin.
Fortunately, surging oil prices present an incredible opportunity for the right investments…
How to Turn the Oil Price Surge Into Profits
Oil prices are going up, and they don’t need to hit the apocalyptic $400 a barrel for you to make a killing, either.
And we’ve got two ways you can turn rising oil prices into profits.
First, you can buy some of the best stocks on the market with exposure to oil, and you can find them using the Money Morning Stock VQScore™.
It’s simply the best way to pinpoint stocks with the most breakout potential.
Take Exxon Mobil Corp. (NYSE: XOM) for example. Exxon boasts a perfect VQScore of 4, making it a prime candidate for explosive returns.
While others might overlook an oil supermajor like Exxon, our system says it’s one of the best buys you can make right now.
Plus, Exxon is already working on a solution to turn high-sulfur oil into the cleaner variety that will pass IMO’s regulations. Its Antwerp refinery is already up and running, and Exxon is sizing up a refinery in Singapore that produces clean diesel.
RBC Capital Markets predicts XOM stock could rise 30% over the next 12 months, jumping from $80.41 a share to $105. But surging oil prices will propel Exxon even higher.
And higher oil prices won’t just benefit oil companies… Click here to see the full story
The oil companies should invest in their refineries and use there multi millions that are getting from the hard working class to for the upgrade. What in the hell did they do with the tax break they recieved, gas prices did my drop even a penny.