Displaying items by tag: oil
The turnaround that energy prices have seen over the last year are simply astounding. This time last year prices were plummeting and there were incredibly dire demand forecasts. Fast forward to the present and you have a very tight supply-demand picture and legitimate talk of the new commodities “supercycle”. With that in mind Goldman has chosen 3 stocks which they say are going to be winners in the new environment: ConocoPhillips (COP), Devon Energy (DVN), and Hess (HES).
FINSUM: Both Devon and Hess are primarily exploration and production companies, which means they are very tied to headline oil prices. Given the tightness of supply, it makes sense they could benefit nicely.
The onset of the pandemic had weak demand for about every good in the U.S. except…See the full story on our partner Magnifi’s site.
Oil has been on a great run this year. Underlying crude oil, as well as ETFs like XLE, have been on fire of late, and most will have noticed the higher prices at the pump. A number of forces—like rising demand and tight supply—have been supporting the market, including OPEC lowering output. All of this has led one prominent bank, Piper Sandler, to say that oil is headed back to $100 per barrel, a level it has not seen in years. According to Craig Johnson at Piper Sandler, “I could actually see a number that could be north of 100 in the next, say, six to ... 12 months from here … To us, it looks like you could have more than 40% upside to get back to the old highs in 2018”.
FINSUM: It is worth noting that this is by far the most bullish call on the street. BAML and Goldman Sachs have their calls for this year at $67 and $75, respectively.
You have probably seen a few articles floating around, but the last several weeks have really hammered it home: we are at the precipice of a new commodities supercycle. The pandemic brought on a huge fall in commodities prices because of a tumble in demand. But as the economy is heating back up, demand is jumping and supply is not matching it. Raw materials demand has surged across the board. Most have been paying attention to oil prices, but check out others like copper and metals. Goldman sees the dawn of a new decade-long demand surge akin to what happened between 2000 and 2010, when the rise of emerging markets/BRICS drove huge raw materials consumption. This time around Goldman says that the green industrial revolution will create a “capex cycle” on part with what happened to emerging markets in the 2000s.
FINSUM: The bank also argues that social and tax policies that are favoring income redistribution to poorer households is bullish for commodities since those households tend to spend a higher percentage of it.
Jeffrey Currie, head of Commodities Research at Goldman Sachs, said there is the beginning of a structural bull market in raw materials…View the full article on our partner Magnifi’s site