Here's How to Trade Biden's Blunder

by Andrew Zatlin July 19, 2022 11:00 am ET

President Biden’s trip to Saudi Arabia was a total bust.

And now the landscape for oil has completely changed.

Here’s what you need to know now — and how to trade it.

For a transcript of this video, see below. This transcript has been lightly edited for length and clarity.

Here’s How to Trade Biden’s Blunder

Over the past year, the price of oil has been on a wild ride:

Prices started climbing as we came out of the worst of the pandemic…

The Russia-Ukraine war sent prices soaring…

Then, after U.S. sanctions on Russia constrained supply, steady demand took the price of oil to around $120 a barrel.

It was only then that President Biden announced a trip to Saudi Arabia. His mission was to ease supply constraints. That’s why news of the trip sent oil prices lower.

Here’s how all these events look in a chart:

The thing is, Biden’s trip was a total bust!

So now oil prices are back on the rise — and a few key factors are going to keep them high for the foreseeable future...

More Supply Issues Are About to Emerge

In Russia, things are about to go from bad to worse.

Sanctions against Russia are hurting the oil supply. But it’s not just the sanctions that are troubling; it’s the oil itself. You see, oil is a corrosive chemical. As such, the equipment used to dig it and refine it is in constant need of repairs.

The thing is, Russians aren’t so good at maintaining their own oil infrastructure. And at the moment, Western technology/equipment isn’t available to them. That’s why more supply issues are about to emerge.

Furthermore, winter isn’t far off. And Russia loves to turn off oil and gas taps throughout Europe to remind countries who’s “boss.”

For the moment, Europe is backing Ukraine in the war. But there’s nothing like a cold day with no gas or heat to convince a country to bend to Russia’s demands.

Meanwhile, the U.S. has its own weather-related problems…

Hurricane Season is Coming

Refineries are needed to convert oil into diesel and auto fuel. And American refineries are at nearly full production already.

In a few months, an above-average hurricane season is expected to strike. And refineries in the path of one of these storms could be wiped out, tightening oil supply even further.

Then there’s China, where supply isn’t the issue — demand is the issue.

The country’s been on lockdown most of this year, but those lockdowns are being lifted. So you can bet that demand for oil in China is going to skyrocket.

Here’s How to Trade the News

Shrinking supply and growing demand means oil prices will remain high. So how can we, as investors, profit from this situation?

First, avoid oil-sensitive sectors like trucking and aviation.

Second, consider investing in oil companies, and even coal companies. I’m particularly intrigued by the coal sector. Europe will need coal to meet its energy needs, and some predict the sector could jump ten percent in the next few months.

But my pick for “Pro” subscribers has even bigger profit potential, so check it out below.

In the meantime, we’re in it to win it. Zatlin out.