The drop in oil prices shows no sign of ending. WTI crude ended at $69.16 for the week ending June 24, 2023. When will the energy boom resume?
OPEC attempted to catalyze an energy boom earlier this year by cutting supply. It attempted to right-size weaker demand and falling prices. When prices kept falling, OPEC announced another cut, effective July 1, 2023.
Economic figures like CPI, job reports, and GDP contradict reports of weak energy demand. A hot economy would increase energy demand. Investors need to look at global events for a clearer picture.
Russia is exporting record amounts of energy to China, Iran, and India, to fund its war. This takes away those countries from OPEC energy demand, hurting prices.
China’s economic slowdown is worsening. Its exports are weakening, indicating poor demand from Europe and North America. The economic slowdown in the West must end before the energy boom restarts.
Investors may add Exxon (XOM), Shell (SHEL), and Petrobras (PBR) to their energy stock list. Their profit margins will rise, thanks to their low production costs.
Energy investors may broaden their holdings with lithium mining and solar energy stocks. As energy prices rise, demand for clean energy alternatives will increase as well.
