Learn about three unstoppable megatrends affecting global energy supply and demand, and how you can take advantage of them right now.
There are very few sure things in markets and investing. So I don't say this lightly: the price of a barrel of crude oil will average over $125 this decade.
Even if I'm wrong, you will want to explore my logic. Because even if I'm too bullish by $25 per barrel, there will still be lots of money made by smart traders exploiting the swings of the global energy megatrend in the 21st century.
My petroleum bullishness is based on three driving "mega forces" affecting global energy supply and demand. And my focus on these secular trends helps me pick winning stocks and ETFs in a half-dozen energy industries. Let's talk about the mega forces first, and then I'll tell you how to join me trading them.
Mega force number one: Emerging marketsBetween the BRIC countries (Brazil, Russia, India and China) and dozens of other developing economies in Africa, Asia, South America and the Middle East; one could estimate that there are two billion people who aspire to the lifestyles of the West. These emerging middle class populations want the same jobs, housing, food, clothes and transportation we have.
As their governments and entrepreneurs oblige, this rapid development means lots of new urban infrastructure, including the roads, bridges, schools, hospitals and energy grids of any modern city. All of this means an incredible growth rate for energy demand. Plus, nearly every new automobile purchase in an emerging economy adds incrementally to oil consumption.
But don't take my amateur economist view on emerging economic development and the energy demands that go along. Here are some forecasts from the International Energy Agency (IEA) in its November 2011 "World Energy Outlook" report:
The last point is especially worth noting if you are an investor in "alternative" energy like solar and wind power. While global energy demand rises by over 30% in the next few decades, fossil fuels only drop off 6% in the total consumption pie.
Mega force number two: Peak oil
You have no doubt heard of the theory of "peak oil". In case you've forgotten its premise, this is the idea that we have reached, or are soon about to cross, the threshold where the majority of known global oil reserves in the ground are at their maximum and will only decline going forward.
Kevin Cook is a Senior Stock Strategist for
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