Investors may want to use any weakness in oil stocks as opportunity.
Yes, President Biden may release up to 180 million barrels of oil from the strategic petroleum reserve. However, that release would only be a temporary band-aid.
In fact, according to Goldman Sachs- as noted by CNBC, “This would remain, however, a release of oil inventories, not a persistent source of supply for coming years. Such a release would therefore not resolve the structural supply deficit, years in the making.”
Also, Ed Bell, senior director of market economics at Emirates added, “For the longer term though, I do think this is a bit of a risky strategy for the U.S. to draw down on its SPR so heavily if you think that we’re going to be going into the more heavy use summer months in the United States, we’re going to be drawing down inventories just as we’re going to be needing them in a time of uncertain supply conditions.”
Don’t get me wrong. The release of 180 million barrels could cool prices – but it would only be temporary. Investors will still be focused on the long-term picture, with reduced supply from Russia, with OPEC likely to stick to existing deals to slowly increase production.
Markets
- The Dow is down 34 points to 35,083
- The S&P 500 is down about two points to 4,594.50
- The NASDAQ is up about 26 points to 15,097.25
- Gold prices are currently down by $2.32 to $1,931.53
- Bitcoin is down slightly at $47,138.59
- Oil prices are down $5.68 to $102.10
- The VIX is up by 1.34 points to 20.24
Trading Tips
We’ve been pounding the table over lithium for quite some time.
That’s because the lithium bull market shows no signs of slowing – at least not soon. For one, by 2030, it’s expected we’ll see up to 125 million electric vehicles on the road. Two, major automakers are starting to abandon internal combustion engines for EVs. Three, governments all over the world wants EVs on the road yesterday.
There’s just one problem. The world is in short supply, with massive demand.
Even the International Energy Agency is warning that the, “The supply of critical minerals crucial for technologies such as wind turbines and electric vehicles will have to be ramped up over the next decades if the planet’s climate targets are to be met.”
So, how do we profit from that? Read more here.
Insider Buying: Occidental Petroleum (OXY)
Occidental Petroleum (OXY) has had a heck of a year so far.
Since January, the stock ran from about $30 to a high of $62.50. All thanks to sky-high oil prices, and an investment from Warren Buffett’s Berkshire Hathaway. Now, we’re learning that CEO Vicki Hollub just bought 14,191 shares of OXY for $798,100 at an average price of $56.24.