Connect with us

Hi, what are you looking for?

Smart Success Strategy – Investing and Stock NewsSmart Success Strategy – Investing and Stock News

Editor's Pick

Oil and Gas Price Update: H1 2023 in Review

The oil and gas industry is experiencing a period of difficulty as prices for the commodities hit low levels following a tremendous high period in 2022. Despite these setbacks, experts believe oil and gas stocks present opportunities.

Read on to learn more about what happened in the oil and gas market in the first half of 2023 and what could be next.

Experts see opportunity in oil and gas stocks

There are plenty of options for investors when it comes to oil and gas companies — firms in this space fulfill a variety of purposes, including drilling, extraction, oilfield services, oil refining and transportation.

“You’re sort of sitting there in an equity getting paid to wait — the balance sheet looks pretty good, and the stock is essentially where it was 24 months ago,” he said. “I mean, it feels to me like it’s pretty asymmetric to the upside here.”

Funds have faced struggles as well this year, with only the United States Gasoline Fund (ARCA:UGA) showing a positive return; it was up 5.87 percent year-to-date as of July 11, as per VettaFi.

How did oil and gas prices perform in H1?

Russia’s war in Ukraine played a significant role in last year’s oil price increase, with levels peaking at US$120 per barrel in June 2022, according to Golinowski. However, since then oil has come back down, ranging between US$67 and US$73.

“It’s literally been a contrast of extremes in really the course of the last 12 (months),” he said.

The price downturn has now created a “high level of bearishness” across the oil and gas market.

This price compression has set new expectations for lower production numbers. A column published by Reuters indicates the industry has gone from an average of 780 rigs drilling for oil and gas at the end of 2022 to just 687 in June of this year.

In terms of gas, the fuel reached a 2023 low point of under US$2.50 per million British thermal units in June.

Oil and gas market still facing COVID-19 aftershocks

“The service industry literally was partially disbanded because everybody had to stop bleeding cash — so every job cut and every production cut, everything was just completely shut in,” Golinowski added. This downturn eventually led to a tremendous rush when circumstances began returning to normal, which sparked inflationary pressures.

“Fundamentally, the oil and gas services industry is tight,” Golinowski said. ‘The equipment is consolidated; there’s very few players left in it. And those companies, I think, are going to hang on to a lot of pricing power.’

Investor takeaway

It’s clear that the oil and gas sector continues to feel the impact of the COVID-19 pandemic, even as it’s being strongly affected by new issues like Russia’s ongoing war in Ukraine.

Price volatility is the name of the game when it comes to oil and gas, and so far in 2023 prices have let down investors.

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com
Enter Your Information Below To Receive Latest News, And Articles.



    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Editor's Pick

    The energy revolution is here to stay, and electric vehicles (EVs) have become part of the mainstream narrative. Despite geopolitical tensions and uncertainty, the...

    Editor's Pick

    Overview Mexico’s Sinaloa state hosts a number of prolific silver and gold mines, including McEwen Mining’s (TSX:MUX) El Gallo Complex, Americas Gold and Silver’s...

    Editor's Pick

    Uranium is an important energy sector commodity, and its rising value has attracted investor interest. 2023 has seen uranium prices solidly above the important...

    Investing

    A new survey shows that the presidential race between former President Donald Trump and President Biden is thin, but Biden faces a deficit in...

    Disclaimer: smartsuccessstrategy.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 smartsuccessstrategy.com