Everyone in the oilpatch is now nervous that the United States could run out of oil storage capacity.  This “storage issue” is now Big News, and is driving light oil prices in the US—WTI—to fresh six year lows of $42-ish a barrel.

I see a lot of copy on the Internet dedicated to this debate.  Is there enough storage capacity?  Is there really just eight weeks left before the industry fills all the tanks? Or will it happen later in the year?

In a fundamental sense, that’s an important question.  As I outline below, there are some pretty smart people calling for as low as $10/barrel for oil because of this issue.

But in a Market sense, it’s not that important.  That’s because just the FEAR of storage congestion is enough to drive and keep oil prices low.

A less well known story is what is happening to demand for gasoline in the United States.   Over the past three months demand for gasoline has skyrocketed.

I’ve identified a company that generates HUGE Free Cash Flow (FCF) from these two trends.

More on that in a minute.

A Very Real Possibility That Oil Is Headed To Shockingly Low Levels

North American oil producers are terrified right now and the graph below explains why.  Oil inventory levels in the United States have hit disturbingly high levels. Worse still, they are headed higher at a record pace.

At the current pace of inventory builds, there’s a chance that U.S. inventories will fill later this year.  If storage becomes full, oil prices will plummet.  That is not a debatable point.

How low could WTI oil prices go?

It is of course impossible to predict with any degree of certainty, but there are some shockingly low predictions being made by some very credible oil market observers.

Former Royal Dutch Shell President and current President of Citizens For Affordable Energy said this week in an interview with Bloomberg that $20 per barrel oil is a real possibility.

Hofmeister is well known as an oil “perma-bull”–which provides some color on how severe this inventory situation is.

Ed Morse–head of commodity research at Citigroup–recently said $20 per barrel oil becomes very possible in the coming months if oil storage fills up.

Morse, BTW, was calling for a collapse in oil prices last spring and he was proven to be exactly correct.

And then there is Wall Street veteran Gary Shilling who thinks oil could fall even further than that.  His target?  $10 per barrel.  Like Morse and Hofmeister, Shilling’s words carry some weight.

In 1981 Shilling said that bonds were headed for the “rally of a lifetime”.  Since then a strategy of rolling a 30-year zero-coupon bond has beaten the S&P 500 by 630%.

These pessimistic views guarantee nothing, but it does indicate there is very real potential for something extraordinary happening.  And that potential is all that’s needed to make my Big Position a Winner.

It Hasn’t Been Well Covered, But Gasoline Consumption Has Surged

While the media focuses on the looming oil storage crisis, you rarely read about how gasoline (and other refined product) consumption in the United States is surging right now.

Here is the year-on-year data from the EIA website:

In December 2014 daily U.S. consumption/demand for oil increased by 464,000 barrels per day over the prior year.  In January 2015 the year on year increase was 544,000 barrels per day.

Since the beginning of February the year on year increase is surprisingly large–at more than 1 million barrels per day.

Americans love their driving, and with $50 oil they can afford to do a lot more of it.

The increase in demand is helping to make the inventory glut better than it would otherwise be, but it isn’t going to solve the problem because year on year oil production is also up by a million barrels per day.

Who Benefits From The Combination of Low Oil Prices And Surging Gasoline Demand?

At the start of last July I sent an e-mail to my subscribers telling them that it was time for me to start selling my oil producers.  I then spent the rest of 2014 figuring out how I could profit from low oil prices.

My work lead me to my latest subscriber pick which I knew would be a huge beneficiary of low WTI oil prices.

However, I greatly underestimated how good things would actually become for this company in the first half of 2015.

Oil has already gone lower than I expected (which is good for this trade) and another leg down is happening now.

On top of that, my latest subscriber pick also benefits from surging gasoline and finished product consumption.

That means the company is posting blow out numbers on both the top and bottom lines which creates huge margin expansion.

Sometimes you are good, and sometimes you are lucky.  In this case for me I think it is a bit of both.

The market is just starting to realize how huge profits are going to be for this company this year.  Before the stock really takes off I’m offering you a risk-free opportunity to read my full subscriber report by clicking here.

I’ve put more than half a year into identifying this opportunity and you can get up to speed in an afternoon.