After crashing into the $20s in early 2016, crude oil recovered to the mid-$50s by the end of the year.
But don't let these wild swings scare you away. As oil demand keeps increasing at the same time that still-low prices cause suppliers to close up shop, the market is coming into balance.
In fact, several factors are now aligning to push oil prices into a long-term rebound in 2017.
Here's where oil prices are going this year... and how you can best play them for profits...
It all starts with a reduction in the "supply glut" that all the talking heads keep beating their chests about. This reversal will occur in two phases.
First, as 2016 ran its course, we saw a dramatic shift in OPEC policy.
The primary cause of the recent drop in oil prices has been OPEC's strategy (led by Saudi Arabia) of maintaining and increasing production levels in order to defend market share, which started on Thanksgiving 2014.
But in 2016, several OPEC nations made clear their opposition to the Saudi policy, with Venezuela, Nigeria, Libya, and Algeria leading the charge. Their goal was to have OPEC impose production cuts that would ease the supply glut and send oil prices higher.
All are facing acute financial meltdowns, with the increases in inflation, unemployment, shortages of food and other staples, and rising unrest that come along with it.
Venezuela's capital, for example, is witnessing the worst food riots in decades, while Nigeria is undergoing an intensifying wave of conflict in the oil-rich Delta region. Libya, meanwhile, is flat-out undergoing a civil war.
Each of these OPEC members requires oil to fetch more than $120 a barrel for any pretense of a balanced budget. In the case of Venezuela, that figure is even higher - a staggering $180.
You can see why they wanted a change in OPEC policy.
But they're not the only ones...
Saudi Arabia is currently trying to wean itself off its almost exclusive reliance on oil by privatizing (parts of) the national oil company, Saudi Aramco, and using the proceeds to invest in other parts of the economy.
But the value Saudi Aramco can fetch on the market depends closely on the price of oil. So by sticking to its guns on pushing oil prices down, Saudi Arabia was shooting itself - and its plans to wean itself off oil - in the foot.
In other words, economically, OPEC had painted itself into a corner, and the only way out was through higher prices. Even the Saudis understood that.
That's why, in November 2016, the Saudis finally ended their call to "hold the line" on production and agreed to production cuts, easing the oversupply of crude oil and opening up the market to higher prices.
But that's only half the story. The second phase of this capitulation is happening here at home...
While the Saudis clearly underestimated the resolve of U.S. producers, the damage wrought by the "oil war" here at home has been extensive.
The U.S. rig count has declined precipitously, while forward capital expenditures - especially for deep, fracked, horizontal wells - have been slashed to the bone. What's more, several major Arctic and Gulf of Mexico offshore projects have been mothballed as well.
That can't help but lead to a drop in supply, especially when it comes to shale or tight oil, where an average oil well will pump the majority of its volume in the first 18 months.
China is facing a similar situation, with oil production there falling by 7% per year since the OPEC-induced oil price crash in 2014. At the same time, the country's demand for oil keeps rising.
Meanwhile, the "bad debt" problem in the oil sector is growing worse by the day. The yield on junk-rated energy bonds is rising with no end in sight, making loans cost companies more and more at the same time as the oil they're selling gets them less and less.
As a result, an increasing number of U.S. producers will disappear, be acquired, or merge with larger competitors, adding to the reduction in overall volume.
When the combination of these market forces take hold, the "supply glut" will undoubtedly begin to shrink.
As for the demand side, the global need for crude is expected to grow by an average of more than 1 million barrels a day annually, led by big increases in Asia.
The fact is, by OPEC's own estimates oil demand in Asia will rise by about 16 million barrels a day to 46 million barrels by 2040. That's almost twice the amount currently produced by the United States.
And that brings us to where the price of oil is headed...
Let me be clear: We are not racing back to $100 a barrel oil. Unless we see some major geopolitical catastrophe that severely restricts oil supply, gentler increases in the price of crude are in order.
Therefore, I now expect West Texas Intermediate (WTI, the benchmark oil price set in New York) to reach $55 to $57 a barrel by the end of the year. Brent (the more widely used global benchmark set daily in London) will be at $58 to $60.
But that's not the most important energy story today - not by a long shot.
You see, while all the media - and institutional investors - can talk about is the surge in the price of crude, they're both missing a potentially much more profitable opportunity...
I'm talking about the booming price of natural gas.
You see, late 2016 saw a much more pronounced rise in the price of natural gas than in crude oil. 2017 will be no different.
Since its low of $1.639/MMBtu on March 3, U.S. natural gas prices have recovered to, as I'm writing this, $3.16/MMBtu - a rise of more than 92.80% in less than a year.
And that's just the beginning.
Unlike oil, which relies almost entirely on the transportation sector for demand, natural gas is seeing a wave of different new uses come online.
From July 2014 to July 2015, the amount of electricity generated by natural gas in the United States grew by 22.81%, while the same number for coal fell by 7.33%.
In fact, 90 to 120 GW of power generation - the equivalent of 120 nuclear reactors - is projected to switch to using natural gas as fuel in the next four years in the United States alone.
And the speed of this change will only increase as the U.S. electricity industry continues to move from coal to natural gas.
Meanwhile, natural gas is also making inroads as a transportation fuel in trucks and other heavy equipment, is increasingly being used as feedstock in the petrochemical business, and has extensive storage in the form of cheap new pipelines with "loops" that can keep gas indefinitely.
And last but not least, last year's opening of the Sabine Pass liquefied natural gas (LNG) export facility - along with several others scheduled to open in 2017 - means that the U.S. surplus of shale gas can now easily be exported all over the world, where it is often much more expensive.
But your real opportunity is on the production side...
You see, unlike shale or tight oil wells, which lose most of their production in the first 18 months of operation, natural gas wells can keep operating much longer than that. Along with rapidly increasing demand, this makes for lower cost operations.
The best way to play this lightning-fast natural gas production rally is CONSOL Energy Inc. (NYSE: CNX).
More Ways to Profit on Energy Right Now Find out what the energy industry's biggest players are really up to - and how to profit from their every move - with Dr. Kent Moors' Oil & Energy Investor. Click here to subscribe now and you'll receive his twice-weekly research at no charge.
I first showed this company to members of my premium research service, Energy Advantage, in March 2016.
Just five months later, my readers were already sitting on gains of more than 60%.
Formerly a coal company, CNX is now almost exclusively focused on natural gas in the low-cost, high-quality Marcellus and Utica shales. The company is also exceptionally well-managed, being one of the first gas companies in the region to stop drilling expensive new wells.
Instead, the company has been completing previously drilled wells, which have helped to decrease their operating expenses by 20% per year (compared to just an 8% decrease for peers) and shed CNX's liabilities by $3 billion.
The company has also signed deals to export its gas to Europe, where gas trades at a premium, via the Marcus Hook Industrial Complex in Pennsylvania. These deals mean that CONSOL, which already doubled in share price last year, could see a similar rise again this year.
Now, a recent earnings report disappointed Wall Street, giving you a great opportunity to get in on the cheap. You see, while all the "talking heads" could see was the headline numbers, what really stood out was CONSOL's intent to continue selling off its loss-making coal business to focus exclusively on the hugely promising gas and LNG export markets.
That means there's plenty of upside left for the company.
All in all, CONSOL stands to grow significantly from its current, still-underpriced valuation as demand for natural gas continues to grow.
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Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, emerging market economic development, and market risk assessment.
He serves as an advisor to the U.S., Russian, Kazakh, Bahamian, Iraqi, and Kurdish governments, to the governors of several U.S. states, and to the premiers of two Canadian provinces.
Moors directs the Energy Policy Research Group at Duquesne University. His six books and hundreds of publications, presentations, and workshops have appeared in 44 countries.