Boomin Oil
Oil has had quite the past year and a half, and today it’s making some moves once again. But before we look at that, let’s see how we got here. First and foremost, and by far the most iconic moment involving oil in the past 18 months came at the onset of the COVID-19 pandemic, specifically on April 20, 2020. On this date, oil prices plunged so low that the WTI crude oil contract dropped 306% to a historic low of negative $37.63. What this meant that there was such an excess of oil caused by heating competition between Saudi Arabia and Russia (the biggest oil suppliers in the world) that supply outpaced demand greatly. At that price, you would have been paid to take the oil! Truly crazy stuff. Since then, oil has made a rebound and slowly increased in price, and although there has been some hiccups along the way like with any investment, it’s safe to say oil is doing a lot better than before.
Most recently, this trend has continued strongly. In fact, oil is expected to continue to move higher in a volatile and bullish manner. Despite these bullish predictions not everyone is so bullish… the reasoning for this lack of confidence is that oil is an international commodity, and the US is not in control in the lions-share of reserves, therefore news must be looked at and followed on a much larger scale. And because the fate of oils pricing lies in the hands of OPEC (who control the production of oil), and they base how much oil to produce in large part off of overseas supply and demand – the continued raging of the pandemic in places like India are not helping a bullish case.
Despite this the market has been seeing an overall surge in demand with production staying largely stagnant, sending prices higher. What do you think about oil? And will you be investing? Or is it too much of a wild card now?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
