Crude oil prices are making new highs this week. Prices are over $110 a barrel and some Wall Street analysts are calling for $150 oil. Not only has crude oil gone up, but heating oil, gasoline and even propane prices are now higher. When will it all end?
Some have called on the President to release oil from the Strategic Petroleum Reserve, also known as the SPR. The Strategic Petroleum Reserve was established back in 1973 after the oil embargo/energy crisis that year. It currently holds over 700 million barrels of sweet crude and the lesser desired sour crude oil.
Crude oil from the SPR has been drawn down on a few occasions over the past 20 years. It was first drawn during the Gulf was in 1991. In 1996 oil was sold off as way to reduce the deficit. In 2005 11 million barrels were sold to make up the loss of crude oil and natural gas production due to Hurricane Katrina.
Will selling more oil from the SPR now help lower prices? Hard to tell. There currently are no shortages of crude oil in the world. In fact the storage facilities in Cushing Oklahoma have more crude there than anytime in the last five years. Also it the government releases the crude oil; they will eventually have to buy it back to replenish the reserves. If prices don’t go down, then we will be faced with paying even higher crude oil prices.
With no relief in sight, is there a way you can profit from this situation? Many people including President Obama are now calling for us to develop natural gas. The United State has an abundance of natural gas right here. This would be a way to create jobs in the United States while removing our dependence on foreign oil.
Invest in Natural Gas
Investing in a Natural Gas ETF might be a wise move. There are several natural gas ETFs to choose from. They range from ones that will invest in natural gas futures and other that will invest in natural gas producers.
If you think energy prices will continue going up, you may want to invest in natural gas ETFs.