“Your Oil I Need” 🛢
“Your Oil I Need”
It’s already March of 2021, this year has flown by fast, and it’s nearly been a year since oil prices tanked and four months since the 2020 presidential election. Since that election, the oil market is up a grand 69%, with oil closing at $63.50 a barrel this past week. If you remember, back in April of 2020, oil overproduction caused an enormous oversupply of oil during the pandemics’ lockdowns sending oil into the negative. So why have oil prices rebounded, and why are they continuing to rise? Well, Jason Bordoff of Columbia University, higher oil prices reflect optimism about economic growth as the world begins the process of vaccinations to move past the pandemic.
Another reason the oil surge could be occurring is the same reason SPACs, and other investments are doing so well, risk. These investments are high-risk, high reward, and currently, low-interest rates encourage investors to bet on risky assets. Oil finds itself in this category because it is a way to bet on higher inflation. The outlook seems bullish in the long-term, with some investment banks calling for a new “super cycle” that could carry oil to $100.
Do you think oil prices will continue to rise? And could this help electric vehicles?
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.