Oil Drop 🛢

Oil Drop

Oil is one of the most integral resources to the functioning of the modern world, without it, many things would cease to function and exist. This resource is traded globally as a commodity.

Since COVID-19 began oil had been largely tied to the virus and moved up on good news and down on bad news. This trend primarily exists because when people go out more, many industries start using more electricity, thus increasing the oil demand. Over the past few months, oil has performed positively, surging nearly 50% since October. Despite this, however, the future may hold a more bearish outlook and a reversal may be coming.

This is largely part due to the new COVID-19 strains and that due to limited vaccine coverage it is becoming difficult to stop the transmission of the virus. The number of deaths in the United States has just passed 400,000 serving as a stark reminder of the long road ahead before the world emerges from the pandemic. On top of this, the long-term outlook for oil also looks somewhat bearish for many investors as President Biden’s revoking of the Keystone XL oil pipeline and his rejoining the Paris climate agreement both hinder oil consumption.

In the broader picture, however,  it seems that general markets are comparatively unaffected by the virus and other political events. Commodities seem to be playing the stock market logically and traditionally.

Will you be holding any commodities? Or will you stick to companies, crypto, or other assets.

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.


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