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To understand where the oil market is headed and how investors might hope to take advantage, one would do well to take a look at what Chevron (NYSE:CVX) said in its investor-day presentation earlier this month. First off, it helps to understand how the energy sector works. In massively oversimplified terms, some energy companies find and produce oil for sale, and others provide equipment and services to those oil producers. If the price of oil goes up significantly, the companies that find and produce oil are incentivized to increase investment in expanding production capacity. And that isn’t difficult for them to afford because the oil they are currently producing and selling is more and more profitable as the price of oil rises, which drives cash flows and facilitates expanding credit using in-ground reserves as collateral. ....
Oil Stocks: The Real Bull Market (XEC, AGYP, MTDR) journaltranscript.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from journaltranscript.com Daily Mail and Mail on Sunday newspapers.
Wall Street PR The oil market is likely going to become a big deal in 2021 because 2020 featured such brutal action, at one point taking the price of WTI Crude down to negative $40/barrel – an all-time low. That crash was precipitated by lockdowns associated with the COVID-19 pandemic health crisis, specifically in March thru May. More importantly, the oil market cowered in fear of follow-on lockdowns for the rest of the year until a viable vaccine was announced in December. That means valuable months were lost with basically no investment in developing new oil production capacity. That introduces the potential for a shortage in the oil market this year, which has energy stocks blazing hot at this point. ....