In the spring of 2018, we suggested that the supply of oil was much greater than demand. Some readers questioned our statement as the cost of oil and therefore gasoline increased during the year. However, that cycle has peaked and oil is now back in the mid $40s per barrel.
Here are the facts you really need to focus on:
- Inexpensive oil and gasoline is a positive for the American economy.
- U.S. oil production is now so dominant in the world that it gives the USA additional economic security we have not had for decades.
- The USA is the only oil producer able to operate at a profit if the price of a barrel of oil is around $40-$45. Low energy costs equal economic growth and security. All good.
We expect the cost of oil to rise sharply. But the world still has access to all the oil it needs. Price increases will be the result of price manipulation.