My
bullish view on the oil price and oil stocks , which as previously discussed
here is likely to act as a catalyst for an escalation of the inflation scare in
coming months, is based on both booming demand and, even more importantly, a
growing lack of supply.
The
One reason demand is running well ahead of supply is not only not just coming
from a re-opened American economy, but also the fact that American households
continue to be beneficiary of the fiscal stimulus cheques that will expire in
Sep 2021.
Meanwhile,
investment in exploration outside OPEC has been declining since 2013 when the
shale boom went bust as US move aims to be carbon neutral by 2050.
The
downturn in investment was further escalate reluctance by financial
institutions to be seen funding such projects that is not climate friendly exacerbating
the lack of supply. This is likely to lead to a structural decline in upstream
investment.
The US
Energy Information Administration’s (EIA) latest Monthly Drilling Productivity
Report shows that US shale oil production has been declining month on month.
As discussed in my earlier post a
week ago, crude oil has turned bullish on a longer term view when it broke out
of its long term downtrend channel in Apr, it should be heading for its near
term target at USD 75 and 83 in the medium term
Stay bullish on oil stocks like
Sembawang Marine, Rex International, PetroChina, Kunlun Energy etc.
My bullish view on the oil price and oil stocks , which as previously discussed here is likely to act as a catalyst for an escalation of the inflation scare in coming months, is based on both booming demand and, even more importantly, a growing lack of supply.
The One reason demand is running well ahead of supply is not only not just coming from a re-opened American economy, but also the fact that American households continue to be beneficiary of the fiscal stimulus cheques that will expire in Sep 2021.
Meanwhile, investment in exploration outside OPEC has been declining since 2013 when the shale boom went bust as US move aims to be carbon neutral by 2050.
The downturn in investment was further escalate reluctance by financial institutions to be seen funding such projects that is not climate friendly exacerbating the lack of supply. This is likely to lead to a structural decline in upstream investment.
The US Energy Information Administration’s (EIA) latest Monthly Drilling Productivity Report shows that US shale oil production has been declining month on month.
As discussed in my earlier post a week ago, crude oil has turned bullish on a longer term view when it broke out of its long term downtrend channel in Apr, it should be heading for its near term target at USD 75 and 83 in the medium term
Stay bullish on oil stocks like Sembawang Marine, Rex International, PetroChina, Kunlun Energy etc.
Sembcorp Marine (SGX: S51): last traded at S$0.205.
Rex International (SGX: 5WH): last traded at S$0.19.
PetroChina (0857.HK): last traded at HKD 3.57.
Kunlun Energy (0.135.HK): last traded at HKD 6.94.
