Oil Prices Rise: Why Hasn’t the Sky Fallen in on Black Gold?

News broke in late January about a six-month interim nuclear deal struck among the United States, five other world powers and Iran.

Immediately, dozens of oil analysts warned the deal would quickly produce a world oil glut and put "serious downward pressure" on oil prices.

Their argument was simple. The deal would allow Iran to export an additional 1.5 million barrels a day. With oil demand currently "tepid" at best, the additional supply would cause the world price to nosedive.

I told you not to worry, and so far my forecast is spot-on. And today, I want to show you why oil prices have plenty of room to rise in the intermediate term.

Obama’s Secret Meeting to Destroy OPEC

This Wednesday, President Obama will be in Toluca, Mexico, at the North American Leaders’ Summit.

You’ll surely see him rubbing elbows with the most-powerful men in Canada and Mexico, and putting on a big smile for the press.

But there’s a shocking, secret truth behind this meeting …

They are conspiring to end North America’s dependence on OPEC oil, and completely shatter the cartel-run organization from the ground up.

Before this big meeting, James DiGeorgia is revealing the details in a groundbreaking new presentation you can view right away.

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The media had a field day with these gloomy predictions. Analyst after analyst insisted oil would absolutely fall below $80 very soon. Some "experts" went even further, warning oil could fall to $70 for an extended period.

News headlines reinforced those fears by reporting that Iranian oil was already starting to flow into global markets. The idea that lower prices are inescapable has become a very popular theme on the Internet as recently as a few days ago.

All these reports are exaggerated, so much so that the U.S. government has issued official statements to the contrary …

I made my position clear last month that I emphatically disagreed with the idea that oil prices would drop because of the interim nuclear agreement with Iran. I asserted that the deal with Iran meant little in the context of the global oil market.

My reasoning was simple …

All Roads Lead to Russia … for Now

Most energy market reporters and analysts suffer "fact amnesia" and forget that crude oil is not a free market.

Anyone with a genuine understanding of the global oil market knows the price isn’t always at the mercy of new supplies.

OPEC leaders have managed their cartel brilliantly in recent years. Today it has a more-cooperative membership and much-closer ties with important non-OPEC nations, including Russia — currently the world’s largest oil producer.

That doesn’t mean OPEC has absolute pricing power. It doesn’t, as we saw when the 2008-’09 financial meltdown hit oil prices hard. Crude plummeted as low as $32.94.

To understand why, you have to recognize what was going on back then. Banks were collapsing all over the world and a dozen nations seemed headed to bankruptcy. The panic upended every financial market in the world.

Yet even before the dust settled, oil prices started to climb — thanks to OPEC’s stewardship. U.S light sweet crude averaged just over $53 a barrel in 2009, and then over $71 in 2010.

We’ve now averaged over $85 a barrel three straight years in a slow, grueling economic recovery. Every step of the way, OPEC and its cooperating partners managed oil supplies to maximize their price per barrel.

OPEC clearly intends to keep oil over $90 a barrel even if OPEC members must reduce output. An additional 1.5 million barrels a day in the long term from Iran (the best-case scenario) will reach the market only when (and if) a final nuclear agreement with Iran materializes.

Given the obvious barriers, the Iranian government keeps telling the press and its populace a final deal may not be possible.

The interim nuclear deal may be the beginning of a multi-year stalemate in which Iran cooperates just enough to prevent military action.

Even a final deal would certainly be implemented in the same cautious and deliberate way as the interim deal — with a choreographed loosening of sanctions, including more oil sales for each Iranian concession.

Iranian oil sales could take years to reach an additional 1.5 million barrels a day. I’m skeptical about Iran’s claim to be exporting million barrels a day currently.

How North America is Putting OPEC

Out of Business

For 40+ years now, the Middle East and OPEC have held the world hostage and manipulated oil prices to take advantage of honest investors like you.

But now, a freshly inked deal in North America is handing the U.S. the power to walk away from the corrupt oil sanctions of OPEC … eliminating the need to "play nice" with tyrant rulers in order to maybe get some of their oil.

So-called "experts" who predicted this kind of thing said it couldn’t happen for another 20+ years. But we have discovered it has already started to happen, in just the past few days.

And those who learn our method of profiting big on this takeover, could be set on the path to a worry-free retirement. Click here to see how.

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Any increase in Iran’s oil exports is going to take years, giving OPEC’s other oil-producing countries plenty of time to adjust their production and maintain their price target.

Even more relevant to all this is that, by the time Iran could really export 2.5 million barrels a day, world oil demand would likely be more than enough to swallow it like a baby aspirin.

Consider for a moment these facts …

  • Even with the current "tepid" demand, oil inventories are at the lowest level since 2011.
  • Oil bears always cite a slowdown in China, but the truth is China still grew at a whopping 7.7% in 2013 when its target was only 7.3%.
  • The U.S unemployment rate is down to 6.6% and our economy is on course to grow at better than 3.1% in 2014.
  • Europe is finally seeing an economic expansion and will beat expectations of 1.7% growth with a better-than-2% rate this year.

I pointed out when last discussing this subject that the world isn’t as peaceful as it should be. Supply disruptions from Nigeria, Libya and Iraq could spike the crude oil price above $100 once again.

The number of armed militant groups, warlords and gangsters of all varieties is growing, thanks to huge weapons stockpiles spread by Libya’s collapse and a decade of U.S. wars in the region.

Even more alarming, the Sunni-Shia war stretching from Lebanon through Syria and Iraq is growing. With al-Qaeda affiliates controlling large areas of war-torn Syria and Iraq, the odds of chaos and oil supply disruptions are growing daily.

West Texas Intermediate crude oil has already traded over $100 a barrel in recent days without any oil supply interruptions by terrorists!

On top of all the good economic news, weather here in the United States has been WICKEDLY cold, burying normally warm Southern regions with huge sleet and snowstorms. Any major supply interruption right now would catapult oil over $120 a barrel, and maybe even to the $148 record high.

On a Seasonal Basis, Oil should be Declining Right Now — But it isn’t!

This is the time of year oil usually begins moving lower. As spring approaches, prices usually move up again, steadily climbing as we approach the summer driving season.

Just look at the chart above. Crude has been in a trading range between $80 and $110 since 2012. Notice the how the triangle is getting tighter and tighter. We could see a break out to the upside forming right now!

The good news in all this … is the oil pessimists have created such negative sentiment that there are many incredible values in oil producers, exploration and services companies of all sizes.

Doom and gloom may drive traffic to financial websites, make good TV interviews and sell more newspapers and magazines — but don’t buy into the "Iranian oil will drown the market" argument. It has no merit.

Crude oil is not going below $80 unless — and until — OPEC wants it to do so.

Watching Your Chickens,

James DiGeorgia

P.S. There’s a shocking, secret truth behind Obama’s meeting with Canadian and Mexican leaders at Wednesday’s summit in Toluca, Mexico.

They are conspiring to end North America’s dependence on OPEC oil, and completely shatter the cartel-run organization from the ground up.

I’ll give you the details before the big meeting. Just click this link here.