Oil Price Predictions   

Are you interested in oil price predictions?  If so, you are like millions of others who have for perhaps the first time taken an interest in oil price predictions.  After the gasoline price increase in 2008 that stopped a lot of consumers in their tracks, the general population became a lot more interested in oil price predictions.  The reason is that consumers have found the correlation between oil prices and gasoline prices, so it is often nice to know ahead of times what may be ahead in terms of the pain at the pump. 

Oil price predictions change from year to year depending on the economy as well as supply and demand.  In 2010 oil price predictions have but the cost of a barrel of oil between $90 and $95.  Of course, some predictions are much higher and some are much lower, but experts generally believe that the price of a barrel of oil will fall within these parameters during the 2010 year. 

Wondering what factors are considered in making these oil price predictions?  Each expert may use his or her own specific factors but generally speaking there are four things that are said to effect the 2010 oil price predictions and those are: 

I.                    The economy should begin to recover which will mean a demand for more oil 

II.                 Investors will likely purchase oil to hedge against the falling dollar 

III.               The expected energy shortfall in OPEC in late 2010 is sure to factor in 

IV.              An easing credit market will help crude oil storage costs 

If you are interested in profiting with the use of oil price predictions you can go about it in several different ways.  First, you might opt for a futures contract on oil.  This is one method to consider but it will involve some serious risk.  Basically, there is the risk of crude oil prices falling unexpectedly.  This could be a great way to go, but because crude oil prices are always changing, this is only for the investor who can stand unlimited risk. 

Another option is the bull call spread.  This type of investment will involve the purchase of a long term oil futures call option contract.  It would be advisable to buy a the price of 80 dollars per barrel while selling the same time frame call options contract at 100 per barrel.  This has a little bit less in the way of risk, but when you are investing based on oil price predictions, there is always some element of risk.