From indications in the markets, the big Oil Price War is finally coming to an end. This war was touched off back in 2014 when Saudi Arabia, in an effort to preserve its own market position against shale oil production, massively increased output from its vast oil reserves to make shale less competitive. This strategy backfired, with the result that crude oil prices crashed to around $20 per barrel. It was a dizzying drop from $120 per barrel price levels seen just a scant few years earlier and cast Saudi Arabia and several other OPEC states into financial and domestic crisis. Now, however, Saudi Arabia has yielded to pressure from other member states of the cartel to curb back on production to mop up the present glut in oil supply. As a result, prices on the West Texas Intermediate (WTI) and Brent commodity exchanges are bringing the per-barrel price back up towards $70.
These trends are likely to continue for the next several years, barring some sudden shock either massively curtailing supply or demand. Assuming a stable rise, however, investors can continue on their present courses and expect rising returns. If the present OPEC estimates of future oil demand hold true, Asia will be gobbling up 46 million barrels per day by 2040. Petro-states will be in line to profit substantially meeting this rising demand. So will investors who pay close attention to the oil market. But oil is not the only royal road to profit to be certain.
Because there is another resource poised to see substantial growth in the next thirty years: natural gas. Natural gas reserves dwarf those of oil, but the uses for natural gas are expanding. Far more than transportation, fuel for electrical generation will be the highest-demand item in the energy sector. And even while solar power, wind power, and other renewable energy technologies enjoy greater development, the need for cleaner and more abundant energy is outstripping these developments. Natural gas is far cleaner and more efficient than coal and far cheaper than nuclear power, which has its own attendant political and waste-management problems. And gas is increasingly being developed as transportation fuel for trucks and heavy vehicles as well as a feedstock material for petrochemical industries. Demand for natural gas is soaring and so will profits in the coming years, and smart investors can reap a huge reward by paying attention to these trends.