Are oil prices set for increase? Two factors may make you think so: (1) the recent attention of the current oil spill in the Gulf of Mexico as well as future tightening of deep water drilling, etc that is resulting; and (2) today's Weather Channel hurricaine predictions for 2010.
The chart above shows the change in water temps for the upcoming hurricane season. That change is the biggest since data was kept starting in 1948. Global warming or not, this rise in temps combined with an El-Nino rebound year and little wind sheer to disrupt the formation of the hurricanes and you have serious potential for dangerous storms to pound the US, which also means the Gulf of Mexico and all those oil pumps.
Its a creative and speculative play but it could work. You could also underline your play with the following logic -- the global economy is very uncertain and market volatility is set to remain high, meaning that most money managers prefer basics and high dividend plays. Outside of food, oil is as basic as it gets.
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