Yesterday, the Dow Jones gave up all its positive aspects for 2023…
Rates of interest are hovering … the 10-year Treasury yields are at their highest degree since 2007.
And the 10-year actual fee, which takes into consideration inflation, is at its highest in 14 years!
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The Prime Price — the speed used as a reference level for pricing some loans similar to mortgages, private and small enterprise loans — is the best it’s been in 23 years!
Many customers who’ve loans tied to the prime fee are actually going to be getting into right into a world of ache.
Rising charges should not a superb backdrop for shares.
I do know it seems to be form of bleak for the market however that’s not the case on this market…
Crude oil.
In truth, crude is within the early levels of a bull market.
It’s up near 30% because the finish of June and it’s simply getting began.
And simply the opposite day the Strategic Petroleum Reserve, which is the USA’ piggy financial institution of oil for a wet day, solely has a 17-day provide.
It’s dropped from the historic common of greater than a 30-day provide.
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Right here’s why that’s very bullish for crude…
The SPR has a capability to carry greater than 700 million barrels of oil.
Proper now, there are solely 350 million barrels in storage — a 50% drop.
Finally, the USA goes to must fill the SPR again up.
Backside line … they might want to buy greater than 300 million barrels…
That may be a enormous quantity of pent-up demand that can drive oil costs, some analysts say, properly north of $150 a barrel in a rush.
If that wasn’t sufficient motive for larger crude costs … wait, there’s extra…
- Low provide: Cuts by Saudi Arabia and Russia have lowered international oil movement. OPEC tasks an enormous each day deficit of oil as we head into 2024.
- Excessive demand: Outpacing the availability. Demand all over the world continues to extend as growing nations modernize.
- Winter is coming: Peak winter months imply a lot of chilly days and extra fossil gasoline to maintain your property heat.
The oil benchmark, U.S. West Texas Intermediate crude, is already shifting larger … from a low of $67 per barrel in June, to almost $95 per barrel just some days in the past.
And the Biden administration is doubling down on “clear power.”
The brand new power plan will end in “the fewest oil and fuel lease gross sales in [U.S.] historical past.”
That is just the start.
Over the previous yr or so I’ve been researching the power markets.
What I discovered turned me from a inexperienced power Tesla driver to creating a full 180-degree flip.
Only a few months in the past, I reached out to an actual professional within the power trade…
Josh Younger, founder and CEO of Bison Investments, a hedge fund which soared 349% in 2021.
Josh has oil operating via his veins.
We talked concerning the interior workings of the trade, the supply-demand story, Chinese language oil consumption and when, not if, oil shall be heading larger.
In case you don’t have a place in crude oil, it’s not too late.
And I extremely counsel you eavesdrop on our dialog right here:
(Click on right here to look at it now.)
Regards,
Charles Mizrahi
Founder, Alpha Investor
P.S. I just lately gave a presentation on a little-known oil firm. It’s doing every little thing proper.
It has lots of of tens of millions of barrels in oil reserves. Tens of millions of acres of land it could actually drill on. A whole bunch of tens of millions of {dollars} in free money movement. And 0 financial institution debt.
