Americans better fill up their gas tanks now, because oil prices are going back up soon. Oil broke through $70 per barrel, just as I predicted. Prices may continue to drop to around $50 briefly, but the ultimate resting point will be around $60.

In classic American shortsightedness, the nation responded ridiculously by buying more of the gas-guzzling SUVs and trucks we love.

However, in a few months you'll see the market start to recover and oil prices creep right back up, taking that $2 gas with it.

But don't just take my word for it, look at the evidence…

Building the Case

Oil prices will recover for several reasons.

First, low prices are stimulating demand. That will sop up any excess production that's hanging around.

Second, OPEC isn't the only one that can manipulate prices. The U.S. fracking companies and oil majors are flexible enough to cut back production and put exploration and drilling plans on hold – which, in turn, will add upward pressure to prices.

Third, U.S. companies are willing to take desperate measures. The marginal players will close up shop or sell assets at fire-sale prices to survive.

And fourth, readers should remember that this is not a time-sensitive game. Much like the natural gas collapse, wells can get shut down and then restarted when prices recover – or when technology improves and reduces costs. The oil under the ground or in the Gulf doesn't just disappear. The asset is still there and it's still valuable… at the right time.

However, the fifth and most important factor has absolutely nothing to do with the cost of extraction.

Cash Wells Running Dry

I stand by my argument that low oil prices won't last because most of the oil-producing nations simply can't afford it.

The chart below shows the fiscal 2014 and 2015 breakeven oil prices for most of the biggest oil-producing countries and OPEC members.