Galiga: Major Oil Boom Set for 2017, Reverse of Fortune

For Americans in oil producing states and those with supporting industries life has been a tough road as oil prices dropped from a high of over $125/bbl just a few years ago to the lowest point in decades at nearly $25/bbl last February. That’s a 500% swing in just eight years and is enough to crush most industries.

But history has shown with oil — as with most commodities — that what goes down must come up. And with the recent changes in the global market, it appears history is proving predictive once again.

Trading guru Mike Galiga argues that the oil market may provide some of the best opportunities for stock profits in recent memory. According to his analysis, most traders were shorting oil as the production glut continued after OPEC repeatedly refused to cut its supply.



Oil prices busts in the last 10 years


But the financial hit that U.S. oil producers took in the fallout also hit members of OPEC. For example, Saudi Arabia burned through several hundred billion dollars in revenue reserves to ride out the wave. The result has been a massive reduction in global supply along with an unexpected spike in demand, largely in the Asia sector.

Galiga also points to the fact that nearly every trader who maintained a short position in expectation that oil would continue to drop has now converted to a long position. He explains, “There is now a higher percentage and larger absolute number of long positions in crude oil than at any other time in recent memory. What does this mean? The big boys expect the price to rise – my expectation is $61 per barrel in the first quarter of 2017.”

If Galiga is right — and he nearly always is — that represents more than a 100% gain in price since the low nearly a year ago. Historical charts appear to proving Galiga’s prediction correct.


Every major drop in commodity price has been follow by a steep recovery

Every major drop in commodity price has been follow by a steep recovery

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