Forbes points out a couple of heavy-hitters with a great track record that are indeed getting bullish on oil here:
Leigh Goehring, a star research-driven commodities investor that has run some of the biggest commodities funds in the world (including a $5 billion fund at Chilton), launched a fund earlier this year with his partner, Adam Rozencwajg (at ticker GRHIX for institutions and GRHAX for retail investors). As I said earlier in the month, they think we can see $100 oil by the first half of next year.
How high do Goehring and Rozencwajg think oil can go from here? Much, much higher:
They think prices can run to above $100 again (as was the case in 2008, when OPEC cut into an undersupplied market), especially given the very negative sentiment on oil prices at the moment–what they call “maximum bearishness.” They say the “peak oil” supply obsession has turned into an obsession with the theory of “peak oil demand.”
The analysts concentrate their research on the demand side of things, and they see a big uptick in demand coming soon. That, combined with the potential for negative supply growth, could propel crude back to 2014 levels.
If Goehring and other oil bulls are right, it could mean huge gains for investors with enough guts to get aggressively long in the near future. One way to do so is via the leveraged bull fund ProShares Ultra DJ-UBS Crude Oil (NYSE:UCO), which has been a complete dog this year so far. But given its double-long exposure to oil futures, it might be the best way for risk-tolerant traders that believe the oil selloff has gone too far.
UCO fell $0.65 (-3.72%) in premarket trading Wednesday. Year-to-date, UCO has declined -25.26%, versus a 8.04% rise in the benchmark S&P 500 index during the same period.