The Magazine for Asian Investors
Crude oil with another strong week. Both major benchmarks were able to rise for the sixth week in a row.
BRENT crude gained 2.4% this week and crossed the $90 mark. In the end, the price broke a new 8-year high and closed the week at $90.03 per barrel.
WTI crude gained 2% this week to $86.82 per barrel.
Also, this week was again under the Ukraine theater, after the West further threats against Russia come and Russia according to statements more and more troops were stationed on the border. U.S. President Biden announced this week that 8,500 troops are ready to fly to Ukraine. But he is said to have said in a phone call with the Ukrainian president that an invasion is very likely. CNN published the data but quickly deleted it, presumably out of fear of causing a panic. In the case of a Russian invasion, it is nevertheless questionable whether the Western countries will really come to the aid, because the example of the Crimea, which happened a few years ago, has shown that one does not really care in the West. So it came at that time just to economic sanctions to make it look that one has done something.
However, it is very likely that the topic will be extended over a long period of time in the media since crises are often covered up by wars. However, Ukraine remains a strategic country for Europe because many energy goods such as natural gas are transported from Russia via Ukraine to Europe. Since Europe gets most of its natural gas from Russia, the geostrategic factors will probably be in the foreground. Anything else would be surprising.
The OPEC and allies will meet again next week to confirm the further production policy. Experts believe that the previously agreed increases in production of 400,000 barrels per day will continue. In addition, OPEC + may also be concerned about oil prices. With rising oil prices, the cost of using oil will be higher for some countries. This could lead countries to switch from oil to other energy sources and thereby reduce the demand for oil. However, other energy carriers such as natural gas are experiencing yet another price rally at the moment, which is why oil demand should remain good.
The major financial houses JPMorgan, Goldman Sachs, and Morgan Stanley expect oil prices to rise above $100 per barrel this year, as market demand should remain strong.
Major oil producers were able to make further gains this week. Chevron (CVX) reached a new all-time high of $136.46 on Thursday this week. In addition, Chevron reported last quarter’s numbers, which were below analysts’ expectations. Chevron reported $2.56 in earnings per share, while analysts had expected $3.13. Likewise, Phillips 66 (PSX) reported numbers that were above analysts’ expectations. Phillips 66 reported $2.94 earnings per share versus a forecast of $1.95.
In general, this year has been dominated by oil producer stocks. YTD, these have so far been able to make big jumps, whereas the stock indexes, however, are moving in the direction of the bear market.
Some of the oil stocks in our watchlist have already gained well over 100% over a period of one year.
Watchlist Oil Stocks
|Name||Ticker||Price||%YTD||Week %||% 1Y|
|Canadian Natural Res.||CNQ||$50.90||20.47%||0.22%||120.25%|
|Royal Dutch Shell||RDS-A||$51.04||17.60%||4.91%||33.47%|
|TC Energy Corporation||TRP||$51.37||10.38%||2.56%||17.71%|
|Duke Energy Corp.||DUK||$104.73||-0.16%||1.70%||14.48%|
Then next week, Exxon Mobile (XOM), ConocoPhillips (COP), Marathon Petroleum (MPC), and Suncore Energy (SU) will report their financial results.