Crude oil has hovered in the $75-$85/barrel range for most of 2010, but lately prices have risen. With oil changing hands at over $90, drivers are bracing for gasoline prices over $4 per gallon some time in 2011. No one wants to pay more to fill up their tank, and higher gasoline prices are regarded as bad news. But bad news is never in short supply - you can find it on any news website. Good news, on the other hand, often lurks in the shadows and gets little press.
Coincident with recent higher oil prices is last week's two-year high for the Dow Jones Industrial Average. Stock markets tend to act as leading indicators - signs that things will get better in the future. Investing is an activity based on the expectation of future gain. Increased investment activity points to increased optimism among investors, and that comes from people seeing (or at least expecting) improvement in our economy. Though unemployment remains stubbornly high, the economy is gathering strength daily.
The recession is nearly over, and $4-a-gallon gas will be a sign that we are back in a robust economy.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).