{"id":9333,"date":"2021-02-18T15:30:10","date_gmt":"2021-02-18T15:30:10","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=9333"},"modified":"2022-02-26T13:05:54","modified_gmt":"2022-02-26T13:05:54","slug":"3-reasons-to-be-bullish-on-oil","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/3-reasons-to-be-bullish-on-oil\/","title":{"rendered":"3 Reasons To Be Bullish On Oil"},"content":{"rendered":"\n

Diana T. from El Paso,\nTX asks: <\/em>Hello Mitch, I wondered if you had any thoughts about a big\nrebound in energy this year. My husband and I work in the oil and gas industry\nand feel like it could be a good year. <\/p>\n\n\n\n

Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n

Thanks for writing, Diana. Generally speaking, I share your\noutlook about the energy sector, and in particular oil and gas. Three factors\ndrive my views: supply, demand, and mean reversion. I\u2019ll explain each one\nbelow.<\/p>\n\n\n\n

Let\u2019s start with supply. In the years leading up to the\npandemic, there was a notable supply glut in crude oil. The shale boom drove\nstockpiles higher, and when the pandemic hit, inventories ballooned \u2013 putting\nintense downward pressure on prices. Since you work in the oil and gas\nindustry, you probably remember the moment when oil futures turned negative, on\nthe heels of extreme uncertainty. You can see the plunge in the chart below.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Source: Federal Reserve Bank of St. Louis1<\/sup><\/em><\/strong><\/p>\n\n\n\n

_________________________________________________________________________<\/p>\n\n\n\n

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