Follow Energy Watch Start the conversation
Comment on This Story
Or to contact Money Morning Customer Service, click here.
Here in the United States, when we hear the term "breadbasket," we usually think of the Midwest. Ohio, Kansas, Illinois...
When Europeans hear the phrase, they think of Ukraine - and for good reason. The country distributes 12% of global wheat exports, 16% of corn, and 18% of barley. Ukrainian agriculture is a pillar of grain production for the European continent.
And now it's under siege.
With Russia tightening the screws on commodities of all kinds, we're about to see prices soar even higher than they already have.
That opens a buying opportunity for us if we get in now.
I think the best place for investors to look is the "granddaddy" of all commodities: oil. If Russia continues its attack on Ukraine and cuts off some of its oil exports and pipelines, we're going to see prices of energy rise around the world.
In fact, we're already seeing some spikes - West Texas Intermediate (WTI), the New York futures-based product that Americans mainly trade, was more than $95 a barrel earlier this week. Brent Crude, the international benchmark of oil, was north of $110 as markets opened Thursday.
And this ride has a long way to go yet, according to analyst predictions. The pick I have for you today is the easiest way for anyone to take quick profits from the commodities supercycle we're in.
Read on for the ticker...
This Oil ETF Is a No-Brainer Buy
The asset you're looking for is the United States Oil Fund (NYSEArca: USO). It's an exchange-traded fund (ETF) that invests in oil futures, specifically WTI futures. Its market value is directly proportional to the fate of oil prices - when they go down, the fund goes down. When it goes up, like it's doing now, USO rides along with it.
I've had this for some time now, going on a year and a half. My average entry price was $32.52. With USO around $75 as of Thursday, I'm up about 130%. But I'm not selling yet. I think USO can go to $90 easy.
From here, that's a 20% move. But the thing is, this window isn't closing soon.
Goldman Sachs is calling for WTI to get to $125 a barrel - and I'm in agreement. In fact, I'm way outside the envelope on every other analyst I know, because I'm predicting $150 a barrel by the end of the summer.
That's why I'm holding onto it, but may take some profits off the table as soon as the ETF hits $90. But this is a trade you can play on any short to medium time frame - get in now for that 20% bump and get out? Profit. Stay in and wait until we hit $125 or more a barrel and the fund goes over $100? Profit.
The opportunities don't end with oil, either. Because what happens with oil is tied into so much of the overall economy, and with the Russia-Ukraine conflict guaranteed to keep pushing things, we've got a chance to make a move in three sectors - energy, metals, and mining - that are massively benefiting from this price hike.
This strategy is already creating some mind-blowing returns - 54% in eight days... 63% in 17 days... 187% in a week. And there's still time to get in.
Follow Money Morning on Facebook and Twitter.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.