Get Energized for $100 Oil by Mid-2022

Hey There Income Hunters,


It was nice to see Light Crude Oil Futures (Ticker: CL) bounce off the $75 level …


I mean, it was a bit embarrassing seeing our president ask our adversaries to increase their oil output. I would think that may come back to haunt us … 


Think 1970s “oil embargo”.


Then we decide to release oil from the US stockpiles, which only reduces the supply in the US…


So basically the US is reducing domestic supply, while pushing for a reduction abroad, ahead of a bigger push from the demand side next year …


This will only put more pressure on the price of oil longer-term as per capita income outside the US grows, and more foreigners need to drive (China) and demand more power for air conditioners (India).


Today, we’ll take a closer look and I’ll share a good ETF to consider a bullish strategy on.  


Slick Stuff


So, Joe Biden wants to release oil from strategic reserves and reduce the pressure on price in the short term …  


However, a supply fix does absolutely nothing to stop the demand growth that we have seen since Q4 2020. 


The problem this creates is that the Organization of the Petroleum Exporting Countries (OPEC) has no option but to counter the production add with a production cut … or just refuse to provide production to the market per their original plan. 


What is actually laughable is OPEC is given a break by not having to meet current quotas which they can’t even hit. The strategic petroleum reserves (SPRs) are doing it for them. 


This creates a disaster scenario for consumer countries and WILL add to the pressure on prices in the months ahead …


Alerian MLP ETF (TICKER: AMLP)


I really like this ETF … It is balanced and diversified, and offers an excellent dividend distribution as you can see in the table below:



Well Diversified Holdings

This is an excellent mix of the transporters and service providers that will perform very well over time as the price of oil stays elevated or rises further. 


AMLP Holdings


AMLP Technical Setup


There is excellent momentum building in AMLP. Notice in the chart below that after a new low was put in on higher than average volume, the next day’s candlestick pattern was a bullish reversal inverted hammer.


That reversal pattern was then met with an up day on higher than normal volume as well.

 


This is a very good spot to get in on the trade and you don’t need to risk a lot … you can close the trade if AMLP closes twice below $33. 


Bring It Home


The drug world is sorting out the Covid variants and designing boosters and oral medications that are inexpensive to purchase.


These developments will reduce Covid to a flu-like condition with full acceptance. This will open up businesses and increase demand for energy just as supply is shrinking. 


The AMLP trade can be played as a put sale while eventually taking ownership of stock, which you can then write calls on to increase your income.


This is a nice inflation beater and profit maker. These trades will keep you ahead of the game while building generational wealth. Have a great weekend and as always …


Live and Trade With Passion My Friends,


Griff

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