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How Traders Must Handle the Peak Oil Shortage, Energy Crisis Hysteria

by | Oct 8, 2021

The impact of the energy market can be substantial — there’s a lot of market cap in there… 

So it’s important to pay attention to red flags that can disrupt the flow — like an oil shortage and energy crisis. I’ve mentioned before that there’s an energy crisis happening right now, and things are about to get a lot worse for us. 

The markets have been extremely volatile over the past few weeks… October is almost always a volatile month, but this year the volatility kicked in early. And now, an approaching winter is going to throw another wrench in things.

Current headlines only make the picture that much clearer.

After OPEC confirmed it won’t increase production, oil rose above $81 a barrel for the first time in seven years. And some analysts are calling for the price to move even higher, to $90 or even $100 per barrel, if we experience a colder-than-anticipated winter.

The company also supplies natural gas, which is hitting multi-year highs on news that its use in the supply chain of electric vehicles will increase production by 7% annually.

In the short run, however, we cannot supply our demand for energy with green technology. That’s something that won’t happen for a long time, if ever.

Case in point: Electric vehicles don’t run on natural gas, but the energy grid that powers them certainly does, especially as coal is phased out in favor of cleaner-burning natural gas. Oil refineries can only produce either unleaded gasoline or heating oil at one time. And making that switch can cause delays, placing stress on the electric grid. 

And right now, the oil shortage, energy crisis and lack of natural gas supply is scary as hell.

How the Peak Oil Shortage and Energy Crisis Affect US Investors

We’re fortunate to live in a country that doesn’t have to fear the prospect of a freezing winter. However, if you’re living in a place like Germany, not knowing if you’re going to have enough heating oil to last you during the coldest months of the year… it’s a terrifying situation. 

The shortage of oil and natural gas affects more than heating peoples homes, though…

If you were to take the world’s usage of electricity and gas, people would be surprised to find out how much energy was used for real world functions. And that’s the crux of the issue. 

We’re nowhere near saying goodbye to traditional energy. It’ll take another 20 to 30 years until trucks and heavy-duty machinery — you know, the things used to aid in the production of consumer goods — are phased out for green energy. 

So that means in the long run, EV stocks will become a smarter investment — heck, I might use them to help with my kids’ college funds. However, in the short term, I see all the money flowing into energy and oil names.

And I have a feeling that crude oil is going to trade over $100 a barrel in the next six month because of all of this.

Luckily, WealthPress Senior Strategist Roger Scott and I have a game plan on how to handle the oil shortage and energy crisis.

We also discussed how to trade China… why Facebook will fail… violent rising rates… and October’s low-hanging fruit. 

Check out the video below to learn more about the oil shortage and energy crisis, and everything else Roger and I covered. 

Send any trading questions to jeff@joyofthetrade.com and stay ahead of the markets, especially these choppy ones, by subscribing to our YouTube channel

WRITTEN BY<br>Jeff Zananiri

Jeff Zananiri

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