If you haven't been living under a rock, you will have noticed the war unfolding. Israel has killed almost all the leading members of Hezbollah, is striking Lebanon, and Iran has hit Israel with nearly 200 ballistic missiles, with Israel promising a harsh response. This is going well... On a more serious note, things seem to be spiraling out of control in the Middle East, with each country deploying increasingly destructive weapons. I won’t go further into the humanitarian consequences of war. I just hope everything stops soon, and no more lives are lost.
You see, Iran, like the rest of the countries in the wider region, is one of the largest oil producers in the world. In fact, they belong to OPEC, the organization that regulates global oil supply.
So, when these regions are bombing each other, it’s only natural that there are growing concerns about global oil production and supply. Therefore due to the law of supply and demand, when supply decreases and demand remains stable, the price of the commodity increases.
One would expect, with all of this happening, that the price of oil would skyrocket ( more than 100$) , but that hasn’t happened, despite the fact that supply is decreasing and an attack on Iran's oil production is very likely. One possible reason is seasonality, as oil tends to bottom out in the fall. Another factor could be the U.S. elections, which historically seem to push oil prices downward.
But how can someone benefit from this investment-wise? The producers claim that they will further reduce supply, AND the demand for energy will continue to increase at a rapid pace. These two facts CLEARLY lead to a rise in the price of oil.
ExxonMobil
One can either long oil it self or buy a stock from a company that drills and sells oil. But how can one decide the company? The numbers are always the best indicator.
ExxonMobil's second-quarter 2024 results showed a strong performance, The company reported earnings of $9.2 billion, a significant increase from $8.2 billion in the first quarter. Despite lower year-to-date earnings compared to 2023 ($17.5 billion vs. $19.3 billion) ExxonMobil generated strong cash flow from operations ($10.6 billion) and returned $9.5 billion to shareholders through dividends and share repurchases.
Now the third quarter is expected to not be that good because of the low oil prices but with the prices rising and the great fundamentals of the company i believe this will be a good investment to hold for the next months
Posted Using InLeo Alpha
This post has been manually curated by @bhattg from Indiaunited community. Join us on our Discord Server.
Do you know that you can earn a passive income by delegating your Leo power to @india-leo account? We share 100 % of the curation rewards with the delegators.
100% of the rewards from this comment goes to the curator for their manual curation efforts. Please encourage the curator @bhattg by upvoting this comment and support the community by voting the posts made by @indiaunited.
I think it's in the best interest of all parties involved to not escalate the situation in the Middle East into a full blown out world war. Going short, in the short term, could also yield good returns for certain investments at the periphery of oil.