The recent shut down of the Alaskan pipeline has been highly publicized. Now that Alaskan pipeline operator Alyeska Pipeline Service Co. has started working to repair the line, should investors who are long oil jump ship? Read on and find out why oil is poised to climb higher.

There are many factors that determine oil prices, and not just the shutdown of a pipeline. The dollar as well as other currencies have been declining recently relative to commodities as global demand for oil continues to rise. As the Fed continues to pump "quantitative easing" funds into the system, one can only expect the price of almost anything else to go up. It is widely publicized among the financial media that experts say the price of oil will continue to rise even though the pipeline will eventually be fixed.

A few price-raising catalysts could possibly include the rising prices of gasoline as the national average of gasoline is now above $3. The United States is not even the No. 1 energy consumer anymore -- China has overtaken the top spot. Also, if one were to look at oil trends over the past 10 years, one would see that there is an overwhelming trend upward, which was only halted by the financial crisis. Now that we are in a recovery, I would expect the prices to climb higher.

According to the Commodity Futures Trading Commission, long positions in oil are overwhelming versus the shorts. According to BusinessInsider, Joe Petrowski, who is the CEO of Gulf Oil and the Cumberland Gulf Group, recently told CNBC that, "There's 1 in 4 chance we'll take out the $147 highs before Memorial Day." This can translate to $4, and maybe even $5 per gallon before next year.

So what does this mean for consumers? Higher gas prices, higher costs at stores (both food and other goods), higher utility bills, higher airline rates, and the list goes on. So, for the oil investor, this translates to profits, but for America as a consumer, it is nothing but bad news.

How to play the trade? BP's stock price is still recovering from the spill this summer, which makes the price relatively cheap right now. BP (NYSE: BP) has been and will continue to be a leader in the industry. Another risky trade is to be long Direxion Daily Energy Bull 3X (NYSE: ERX) It is volatile and can fluctuate quickly, so investors beware.

BP is trading higher at $47.92

ERX is trading lower at $62.93

Benzinga

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