Despite short-term volatility, long-term investors should not overlook oil-related investments.

Political, cyclical, and secular factors combined to cut the price of crude oil in half, from a high of $107 per barrel in mid-June to under $60 per barrel in December. While it could fall lower in the next couple of months, oil is likely to be back toward $80 sometime in 2015, in our analysis. If not, oil prices may be well over $100 per barrel in three to five years.

Behind the Price Drop

The secular factor driving down prices has beenthe relentless rise in U.S. oil production from shaleoil fields, made worse in recent months by cyclicalweakness in global demand: emerging economiesweakened, Japan’s economy slipped into recessionand Europe’s outlook tumbled.

The political factor has been Saudi Arabia’s attempt to impose discipline on the rest of the nations comprising the Organization of the Petroleum Exporting Countries (OPEC) and the U