Recently, media headlines are increasingly full of phrases that oil is becoming more expensive, and the price of black gold is breaking all records. At such moments, every investor who has not invested in the sphere has thoughts like: "why didn't I know this before" or "I wish I could go back in time." But, it should be understood that such thoughts and conversations will absolutely not help you earn anything, because you need to live in the present moment and the future, and not the past.
That is why we decided to estimate what will happen to the industry in the coming months, to understand the reasons for the rise in oil prices, and also to think about where to invest right now.
Why is oil becoming more expensive?
In order to understand whether the trend will continue, it is worth understanding what its nature is. As for our rise in price, the reasons for this growth are quite clear. The first and main reason is the massive forced transition to green energy, which entailed underfunding of the industry, both from the state and from the private side.
The lack of money, in turn, led to a certain deficit, which led to an increase in the price of black gold.So, recently the number of working and developing wells has significantly decreased from almost 8 thousand to 5 and a half.
The second reason is the disasters in the Gulf of Mexico, which led to the destruction of a fairly powerful oil production infrastructure, which previously provided a fairly serious flow of "relic fuel" to the American and world markets.
The third reason is partly related to the first and is the increase in the price of gas. Similarly, due to the forced transition to green energy, the price of blue fuel began to grow, which in turn led to the search for alternative sources, one of which was oil.
The last reason is the OPEC+ agreement, which significantly reduced the level of world oil production.
Is it too late to invest?
Well, with the reasons for the trend, we figured out, now it is worth thinking about whether we are late and whether the line on the chart will turn in the opposite direction. To be honest, there are few reasons for such a sharp turn, but they should be taken into account.
First, the states that are members of OPEC+, against the background of the growth in the cost of black gold, can change the terms of the agreement and refuse to reduce the amount of production of the resource. Nevertheless, it should be borne in mind that even in the case of such a scenario, it will take quite a long time to fulfill the terms of such an agreement and increase the level of production.
Secondly, now not the best period is lived by the economy of China, which for a long time has been one of the main consumers of the resource.
Nevertheless, these reasons for the fall will still not be able to "interrupt" the reasons for growth, so it is not too late to invest in the industry. Moreover, some experts considering the potential of the sphere concluded that $ 80 is far from the limit, and the price will grow up to 100 and above.
In addition, the shares of many oil companies today remain undervalued even if we are talking about the level of 70-80 dollars per barrel. The cost of securities of oil companies sooner or later will be adjusted on which you can also make good money.