The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.By Frank Holmes NEW YORK ( U.S. Global Investors) -- Does it feel like it costs an arm and a leg to fill your car these days? Although consumers may continue to feel the bite from higher gasoline prices, investors can use these rising prices to their advantage.
By comparison, the U.S. currently has the largest emergency petroleum supply in the world, stockpiling about 570 million barrels of crude oil at four sites located along the Gulf of Mexico. China is not the only emerging market expected to consume more oil. When I was in Bogata, Colombia a few weeks ago, I saw gas stations posting prices around $5 a gallon. And its citizens can only fill up their gas tanks a few times a week. Yet the economy is booming and the streets are jammed with cars. There's still tremendous demand in this country, as well as many other growing emerging markets, even with higher gasoline prices. One question I'm asked when oil jumps in price is, will it hurt the U.S. economy? I don't believe so. Many analysts believe the economy is in a better position to adjust to higher prices, especially when you compare last year's oil spike to this year's. In 2011, fuel prices rose more than 50% in a matter of only a few months, says BCA Research. This "very quick and forceful advance" occurred at the same time that U.S. consumers were driving more miles, the number of unemployed workers was at a high, and job creation was nonexistent, says BCA. This year, the rise in fuel costs has been more gradual, says BCA. What's more important to BCA is that "consumers are in better shape than they were last year," with job creation, unemployment, and income expectations all posting improved numbers. In addition, the U.S. has experienced an unseasonably mild winter, giving furnaces a welcome respite and their owners lower heating bills, making the higher payment at the pumps a little more palatable. Also, central banks around the world are in "full-on expansion mode," says BCA. This needed liquidity and support for growth provides an injection of confidence directly into the global consumers' veins. Beware of biases by oil analysts: Deutsche Bank research going back to 1999 found that analysts "consistently underestimate" the Brent oil price by an average of 27%. The chart below shows the forecast price made by analysts compared to the actual Brent oil price. Every year, analysts have underestimated how strong Brent will be, ranging from as little as 2% to as high as 54%. Using the average forecasting error, Brent could be as high as $135 a barrel.
We expect there to be corrections in the price of oil throughout 2012, just like the ups and downs commodities experience from year to year. While the world is hungry for energy, there's no free lunch on the Periodic Table of Commodities, and historically, from year to year, commodities fluctuate. Crude oil, for example, has seen its share of ups and downs: In 2008, oil lost 53%; in 2009, it increased a substantial 78%. On our interactive version of the Periodic Table of Commodity Returns, you can see this for yourself. Click on a particular commodity and see how it has performed each year over the past 10 years. See the interactive table. While oil may remain elevated, use these higher prices to your advantage by owning natural resources companies or funds such as the Global Resources Fund ( PSPFX) that potentially benefit from higher prices. This gives investors a way to potentially offset those higher gasoline bills. For more updates on global investing from Frank and the rest of the U.S. Global Investors team, follow us on Twitter at www.twitter.com/USFunds or like us on Facebook at www.facebook.com/USFunds. You can also watch exclusive videos on what our research overseas has turned up on our YouTube channel at www.youtube.com/USFunds.