Three Reasons to Bet on Oil

With oil prices crashing, many investors have been shying away from the sector. Should you follow them? Absolutely not! Today I’ll share three reasons you need to have oil stocks in your portfolio now. [mbd-thumbnail] CLICK HERE TO LAUNCH VIDEO OR READ THE FULL TRANSCRIPT BELOW »» [/mbd-thumbnail] [mbd-video][/mbd-video] [ad] ADVERTISEMENT 24 words that killed […] You’re receiving this email as part of your subscription to Andrew Zatlin’s Moneyball Daily [Unsubscribe]( [Moneyball Daily] Three Reasons to Bet on Oil October 06, 2023 With oil prices crashing, many investors have been shying away from the sector. Should you follow them? Absolutely not! Today I’ll share three reasons you need to have oil stocks in your portfolio now. [CLICK HERE TO LAUNCH VIDEO OR READ THE FULL TRANSCRIPT BELOW »»]( ADVERTISEMENT 24 words that killed the U.S. dollar At the 2023 World Economic Forum, Saudi Arabia's Finance Minister made a shocking announcement. After uttering just 24 words, it was clear he had just paved the way for utter disaster for the U.S. dollar. [Click here to see how to protect your money before year's end](. For a transcript of this video, see below. This transcript has been lightly edited for length and clarity. Three Reasons to Bet on Oil This chart has a lot of investors running scared: The chart shows the price of a barrel of oil over the past year. As you can see, the price has plummeted recently — it’s down $10 in just a few days. This price drop has plenty of investors spooked and fleeing the oil-investment market. Today, I’ll give you three reasons why we should be doing the exact opposite. Reason No. 1: Perspective Based on the chart above, the fall in oil prices might seem concerning. But let’s widen our view of the situation. Take a look at a 10-year snapshot of oil prices: Notice how oil has more or less hovered around the $80 mark for the past few years. It hasn’t dropped below $60 since COVID. Part of the reason is fundamental economics. Simply put, $80 is the new $60. When you factor in inflation, $80 for a barrel of oil isn’t out of the ordinary. In fact, it’s right on target. So seeing the price fall to this level shouldn’t be cause for concern. It’s simply the commodity finding its way to the “new normal.” Reason No. 2: Affordability Some investors might assess oil-related investments based on the price of the commodity. Others, meanwhile, make their investment decisions based on what’s happening at the pump. You see, it’s no secret that gas prices have risen dramatically. In 2010, the average price of a gallon of gas in the U.S. was $2.79. Last year, it reached $4.90. Those deciding whether or not to invest in oil might look at that rise and believe that as prices climb, fewer consumers will be able to afford gas. And that’ll drive down demand for oil — not exactly a bullish sentiment. But perhaps surprisingly, the increase at the pump isn’t hurting the average consumer’s wallet as much as you might think. Let me show you: This chart from Bank of America shows the price of gas as a share of hourly wages, dating back to 2007. Right now, we’re actually at the low end of how much a gallon of gas impacts a consumer’s hourly wage — in other words, how much of their paycheck goes towards gas. Simply put, gas prices may be climbing. But by and large, consumers can still afford it, and have no trouble ponying up a few extra dollars to fill their tank. They’ll also need gas for the foreseeable future, because despite the hype around electric vehicles, gas-powered cars and trucks aren’t going away anytime soon. Reason No. 3: Supply Let’s talk about the third reason to be bullish on oil: supply. The sanctions put on Russia have taken massive amounts of oil off the market. Yet demand continues to increase. As you might know, when demand rises and supply falls, that creates a seller’s market — Economics 101. Here’s the thing: In the wake of these sanctions, Europe no longer imports Russian petroleum. In fact, the continent imports 90% less oil than it used to from Russia, and 70% fewer petroleum products. But if demand is still raging, where is Europe turning to for its oil? The U.S.! America is now the top supplier of oil and petroleum byproducts to Europe. And that’s huge. Essentially, the U.S. can name its price — it’s a seller’s market, after all. Meanwhile, companies focused on exploration and production are racing to provide this oil and reap the rewards. Buy, Buy, Buy Bottom line: Oil is, and will continue to be, a hot commodity. And you need to have oil stocks in your portfolio, because they’re likely to deliver juicy profits in the short and long term. If you’re a Moneyball PRO subscriber, I’ll reveal my favorite oil-related investment. It’s a company I expect will blow away the results of the broader market in the years to come. In the meantime, we’re in it to win it. Zatlin out. FOR MONEYBALL PRO READERS ONLY > [LEARN MORE]( < In it to win it, [Andrew Zatlin] Andrew Zatlin Moneyball Economics Copyright 2023 © Moneyball Economics, All rights reserved. You signed up on []( Our mailing address is: Moneyball Economics 1125 N. Charles Street Baltimore, Maryland 21201 [Update Subscription Preferences]( | [Unsubscribe from this list]( | [Terms & Privacy]( RISK NOTICE: All investing comes with risk. That includes the investments teased in this letter. You should never invest more than you can afford to lose. Please use this research for the purpose that it's intended — as research only. You should consult a professional financial advisor before ever taking a position in any securities you see herein. 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