Oils Next Stop Could be $150



Larry Edelson discusses five reasons why the price of oil could reach $150 a barrel in the near future. Mr. Edelson takes a closer look at the influence Asia has on the price of oil.

As oil busted out to new record highs again, soaring more than $16 just recently, Edelson questioned every indicator at his disposal. He wanted to figure out where oil prices would go next, objectively, without emotion. His conclusion was that oil's next major stop could be $150 a barrel. Here are five reasons why:

First, oil prices are rising even though the U.S. economy is tanking.

Second, U.S. refineries are operating at levels considerably less than their capacity. In fact, refineries in the U.S. are running at less than 90% of capacity, due to poor maintenance, reduced productivity of workers, no new technology, and more.

Third, nearly all of the same, powerful, supply-and-demand forces that have driven oil from $13 to $138 are still firmly in place:

- The world is no closer to resolving the disruptions and bottlenecks in the oil market now at $134 oil, than it was at $30, $40 or $50 oil.

- China is still modernizing at a rapid pace. India is still in a massive growth spurt. The rest of Asia's economies are still surging. Nothing has changed.

- Never forget that between Russia, India and China; more than three billion new capitalists have appeared on the world markets.

Consider that although the U.S. is the #1 consumer of oil, the U.S. represents only 4.8% of the world's population. That means that more than 95% of the world's population can dramatically impact oil inventories. Moreover, at least 50% of the world's population (in Asia) lives in countries where the economic growth is as much as 14 times greater than it is in the U.S. So while demand may be or will soon slump in the U.S., demand overseas is more than adequate to offset the decline and is probably growing at rates higher than is being reported.

Fourth, although oil has exploded higher, it's not yet off the charts. Quite to the contrary, the charts show it still has plenty of upside potential left on this move to Edelson's longer-term target of about $200 per barrel.

Fifth, several sources in Asia told Edelson that China is now buying oil like mad for several reasons. The Olympics are just around the corner and Beijing does not want an estimated 10 million tourists and athletes from all over the world to put up with brownouts.

Furthermore, In no way does Beijing want its citizens to suffer from high oil and gas prices or brownouts this summer, especially in the aftermath of the earthquake that sadly took nearly 70,000 lives, and displaced five million people. The rural countryside is already angry with Beijing on the lax building code enforcement and building cronyism. The last thing Beijing wants is an uprising on energy prices.

What's more, China's strategic oil reserves are now being filled, with an aim toward storing at least 30 days worth of oil imports, or roughly 292 million barrels of oil.

"How does China get the oil to fill up these huge storage tanks By going into the open market and bidding for oil aggressively. I suspect that's the hidden force that's been helping to propel oil sharply higher and will continue to do so," Edelson states.

To read this issue online, please visit:

http://www.moneyandmarkets.com/Issues.aspxIt-is-not-too-late-to-profit-1880

About Larry Edelson and Money and Markets

With nearly three decades of experience in precious metals and natural resources markets, Larry Edelson has played a pivotal role in training Weiss Research staff and in guiding Weiss Research's customers to prudent investments in the sector. His Real Wealth Report, Gold Trader Hotline and Energy Options Alert provide a continuing education on natural resource investments, with recommendations aiming for both profit and risk management. His team of technical analysts helps enhance the timing of investment recommendations with the aim of continually improving the performance results for investors.

Mr. Edelson is also a regular contributor to the daily e-letter, Money and Markets. Recognized as an expert in precious metals and natural resources, he is often called upon by the media for his investing views. Mr. Edelson has been featured on Bloomberg, Reuters, and CNBC as well as The New York Times, New York Sun, and Marketwatch.com

Mr. Edelson holds a B.A. degree from Columbia University.

Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.





Oils Next Stop Could be $150