Oil shatters its previous high - hits $122! APC jumps sharply is DVN next?

Dear Subscribers,

Oil just hit another all time high - $122 barrel.

I find it amazing that so few analysts in this sector are posing the question... "If supplies are tight now, what will happen if the U.S. Economy actually bounces back and we see a growth in oil consumption that pushes to the high end of expectations?" The answer, of course, is... $150 to $200 oil happens.

This reality may behind yesterday's Goldman Sachs Group analysts led by Arjun Murti prediction that... "The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the up cycle remains a major uncertainty" which was included in a report by the brokerage firm issued yesterday, May 5, 2008.

While Murti was at the very least 2 years behind us in predicting $100 oil, he was the author of "Super Spike" in March 2005; he deserves recognition and credibility as one the first on Wall Street to predict between $50 and $105 a barrel oil through 2009.

Meanwhile, Anadarko Petroleum Corp. (NYSE: APC) a long time favorite of mine, is up over $7 to $75.10 today -- as I write.

I'm not eager to employ any covered call strategy on this stock despite its big move because I think DVN could push well into the $80s during the next several weeks.

Tomorrow, Devon Energy Corporation (NYSE:DVN) reports and its stock is up another $3 today ... pushing towards the 52 week high.

If the report from Devon is as strong as the one being delivered by APC, Devon could not only break out and head to the mid $140s, it could provide the energy to APC to insure my short term target.

The gold market has backed off its highs and while a deeper deep might be in the cards at some point, I think it's foolish to make a bearish bet for anything other than a short term trade.

Investors should be loading up their IRAs with gold and platinum on this pull back under $900 to position themselves for $1,100 to $1,200 gold coming in 2009.

Please consider this a banging the desk recommendation where I'm actually begging you to place physical gold in your portfolio. The dollar will move much lower in the next few years — even while the U.S. economy bounces back.

Best Wishes,

James DiGeorgia

Editor & Publisher

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