The price of oil has to at least triple in the next few years. This could easily be your ticket to an earlier or richer retirement.

The price of oil is a function of many things, but as with all economic issues its prime mover is demand. Demand for the past 18 months has been dropping due to the economic meltdown worldwide. This has made for great energy prices, but it’s like a warm day in January in Canada.  It’s not real and anyone who has ever lived through a northern winter knows it will not last.

Why?

First, the world is coming out of this recession and oil demand is about to explode and we, the USA, the biggest energy pig in the world, have done nothing to prepare for it. We have less of an ability to provide for our energy needs now than we did 35 years ago.

Second, Asia and the rest of the developing world are coming out of this worldwide slow down, too. Consider how much more oil will be going to Asia and the developing world as they rebound and start to suck up what’s left of the world’s capacity to produce black gold. The demand picture really begins to come into focus.

Third, the current effort of the Obama administration to avoid a depression by pumping trillions into the economy has worked. We are soaring out of the hole faster than anyone could have imagined a year ago. At the same time we are doing so with no way to fuel it, literally fuel it.

We are completely unprotected from the threats to our economy and future well being that comes from importing 75% of our oil.

Fourth, there has been zero new development of oil reserves partly because of a very admirable effort by the Obama administration to shift to clean renewable energy. Clean and renewable is great, but we have about a ten year gap that has to be filled with oil before we can make that a reality.

Fifth, a dysfunctional congress whose priorities are their careers, their party, their district and whatever is left over goes to the well being of this country, in that order. Congress is all but incapable of working toward a long term solution to the problem.

Add them up and we have all of the necessary elements for the biggest rise in oil prices in our history over the next three to five years. Here’s how we can make money on this mess.

DXO, Power Shares Deutsche Bank Crude, or DIG, Ultra Oil and gas Pro Shares, both are designed to give you twice the percentage return of any increase in the price of oil. In the past month or so DXO bottomed at about $1.90 per share and ran to about $3.20 on just a $12 dollar move up in the price of crude. That’s a 68% move. DIG has had a similar neck snapping rebound.

If oil only goes to the $75 range, which is a given at this point, the DXO and DIG stand to move another 130%. The money we can make here is mind boggling.

The best part of this play is that it is inevitable. The chances of oil not moving up in price are almost zero.

You will only get a few opportunities like this in your investing life. Think of all the times you looked back at the market and thought how great it would have been if you had put money in at the bottom. This is the bottom!

As always time is the key to the success of this recommendation. A move to $75 a barrel is very likely by the end of this year, but the big money could be several years out. Give this time to work and you won’t be disappointed.

100% plus this year is just the beginning of this move.

Good luck!
Steve