Global oil demand is beginning to recover. The US government’s Energy Information Administration (EIA) recently increased its 2010 estimate for world oil demand growth by 270,000 bpd to 1.5 million bpd. OPEC also joined the US government’s forecasters in raising oil demand estimates this week by 880,000 barrels per day (bpd) to average 85.24 million bpd. Their monthly report also shows the growth rate is up 70,000 bpd as well. So where is this demand coming from? Well it’s not coming from the power consumer United States, or any other OECD country for that matter. Demand in developed OECD countries is expected to decline by around 150,000 bpd. It’s coming from China, India and the Middle East, where demand is expected to increase by 1 million bpd. That’s not surprising when you consider the massive expansion in China’s and India’s automobile markets in the last year. China’s motor vehicle sales rose an astounding 46% last year to 13.6 million, while India’s car sales topped 2.5 million in 2009. And as these petroleum-thirsty automobiles take to the roads, the consumption of gasoline — and thus oil — rises rapidly. Don’t be surprised to see oil scream past $90 a barrel in the near future. In my opinion, a return to $100 oil is imminent. Prepare yourself to profit by loading up on cheap, well-run junior oil companies. These guys are highly-leveraged to higher oil and as a result, have the most to gain as prices rise. Yours in profits, Roger Gaines
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