According to news “Goldman Sachs is now calling for oil prices to hit $100 a barrel later this year and continue rising in 2023, signaling higher prices at the pump are on the way.”
Histroy price in energy sector
Current oil price is highest in last 7 years ! and before we go to 2022-23 let’s see what happened to energy prices in 2021. Below Chart Suggests that that Gas ( 200% ) and oil ( 56.40%) were among the highest % gainers in energy commodities.
🔎 𝗟𝗼𝗼𝗸𝗶𝗻𝗴 𝗮𝘁 𝘁𝗵𝗲 𝗳𝗼𝗿𝗲𝗰𝗮𝘀𝘁 according to experts ” By summer, the bank expects oil inventories in advanced economies will sink to their lowest level since 2000 ” if this happens there will be huge pressure on production and that could lead to price hike ! But growing demand is not the only point which is causing the price hike in fossil fuels. in 2020-2021 Billions of dollars moved out of Fossil fuel back ETFs and funds to renewal energy ETFs and funds. causing companies to cut back on infrastructure like pipe lines new drills for oils etc.. And when the worries of Covid-19 is fading in near future demand is picking up but due to lack of infrastructure in fossil fuels delivery is slow hence causing the price go sky rocket.
💰 𝗪𝗵𝗮𝘁 𝗮𝗯𝗼𝘂𝘁 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗽𝗼𝗶𝗻𝘁? if we look at the past 50 years data energy and mining sectors have done quite well in inflation and rising interest rate environment . if you look at the recent move of these two sectors they are green compare to tech or semi conductor. clearly showing the trend here. Check out : iShares MSCI Global Metals & Mining Producers ETF iShares Global Energy ETF
🌎 𝗚𝗲𝗼-𝗣𝗼𝗹𝗶𝘁𝗶𝗰𝗮𝗹 𝗿𝗶𝘀𝗸𝘀 : The strike on a leading Gulf Arab ally of the US takes the war between the Houthi group and a Saudi-led coalition on a different level , and may hinder on efforts to contain regional tensions as US and Tehran works to rescue a nuclear deal. The damage to the UAE oil facilities in Abu Dhabi is not major in itself, but it raises the question of even more supply disruptions in the region in 2022-23.
🙅♂️ 𝗢𝗣𝗘𝗖+ 𝗔𝗴𝗿𝗲𝗲𝗺𝗲𝗻𝘁 : They did announce to allow production of extra 400,000 barrels a month. but suppliers are even struggling to produce that much . so OPEC cant do much if the supply itself cant be increased.
📌 WITH ALL THAT
there is optimism on energy sector to perform well in coming year or 2 and oil touching 100$ is a possibility . Frankly i do not trade oil or gas but preferer stocks or ETFs. so if you invest watch out for volatility . Follow for more analysis or Updates.