The future price of oil holds the key to energy stock performance
Energy companies’earnings are highly correlated to the price of oil. Their stock prices reflect not only the current conditions, but also future expectations for the price of oil. At near $88 a barrel, West Texas Intermediate crude oil futures are trading below levels prior to Russia's invasion of Ukraine as consumers cut back their usage amid inflation and worries about the economy but are still about 14% above their price at the beginning of the year. The International Energy Agency cut its global oil demand forecast for both 2022 and 2023 slightly earlier in July, but the organization is still expecting growth in both time frames. Meanwhile spending by the big oil companies is expected to be down 50% compared to 2013, according to Bloomberg News. That will limit their ability to increase supply. Increased demand and limited supply could prevent oil (and energy stocks) from falling too much lower barring a major economic slowdown.
The views and opinions of Moomoo Navigator are those of the author who is not an associated person of Moomoo Financial Inc. The view and opinions of the author do not reflect the views of Moomoo Financial Inc. or any of its affiliates. The views and opinions of the author are provided for informational purposes only, do not constitute a recommendation of an investment strategy or to buy, sell, or hold any investment in any form, and are not research reports and should not be used to serve as the basis for any investment decision. All investments involve risk including the loss of principal and past performance does not guarantee future results.
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Johnnie Worker : Thx for the great insight. The long-term supply shortage leads to good days of the oil stocks
Dons hobby : Mooney, I am asking because I am still learning. If there was more oil production are there enough refineries operational that aren't running at top capacity to refine more Crude. I do know that as long as the MUSH HEAD that is in office there is NO oil Company that will invest money to build a new one. Especially with the war on oil, these morons are engaged in ?
Wes 88 : won't be too much longer and everything will be EV.. Lithium is something I personally am looking at.. just my opinion
Dons hobby Wes 88 : I totally agree
Justin Zacks OP Wes 88 : It might be longer than you think. Refined lithium is in short supply and one of the many bottlenecks that will slow the availability of electric vehicles to everyone. Tesla CEO Elon Musk mention the shortage on the company’s Q2 earnings call and encouraged entrepreneurs to enter the lithium refining business.
The views and opinions of Mooney Navigator are those of the author who is not an associated person of Moomoo Financial Inc. The view and opinions of the author do not reflect the views of Moomoo Financial Inc. or any of its affiliates. The views and opinions of the author are provided for informational purposes only, do not constitute a recommendation of an investment strategy or to buy, sell, or hold any investment in any form, and are not research reports and should not be used to serve as the basis for any investment decision. All investments involve risk including the loss of principal and past performance does not guarantee future results.