It's not often you read predictions of falling oil prices but self-made multi-millionaire trader and investor Vince Stanzione is betting on lower oil prices in the next 5 years and a boom in U.S. oil & gas production that will give the American economy a well-needed boost that could see the country not only being totally energy independent but an actual net exporter by 2020 - too good to be true?
Before dismissing the call as crackpot, Stanzione is well-known for his contra financial calls such as the one he made in September 2011 that the Dow Jones would bounce back and hit a new high in 2013, which currently looks on track and stands 27% higher than it did at the time.
Stanzione uses his propriety trading system to seek out undervalued and overvalued assets, and right now one of the most overvalued according to his model is Crude and Brent Oil and calls current prices "totally removed from reality," as $50 to $65 seem to be more the normal in the next 5 years as demand declines and new global supply comes on tap.
"The U.S. oil and energy boom will create millions of new jobs, help give the country a competitive advantage and eliminate the political risk premium that plays a big factor in current prices," says Stanzione. "A low-cost energy boom is the way the U.S. can cut its current deficit and a more stable oil price will help consumers and businesses plan and prosper."
Stanzione points to lower demand and demographic changes towards motoring, more efficient engines, hybrid cars becoming the norm and a big increase in natural gas-powered vehicles; however, he cautions that the merits of electric cars are still questionable.
How can you profit? "Investing in the stock market is not a bad idea; every dollar the consumer and businesses save in gasoline puts money back in to the economy. Everything from the price of a banana in the store to a book delivered to you by Amazon is affected by the oil price. More sophisticated investors can look at options and futures which would allow you to profit from falling prices," opines Stanzione.
Iraq, Canada and Brazil all have great advantages from new oil discoveries and more effective drilling techniques such as vertical drilling.
Stanzione warns that this "energy gift" should not be squandered: consumers should not return to the gas-guzzling SUV days, investment must be made in public transport and commercial vehicles moving to natural gas and more efficient engines.