Oil stocks have had a very volatile year due to the volatility in the underlying commodity. With demand for energy decreasing during the pandemic, it has not been good news for the commodity. In the last couple of months, however, oil prices have climbed due to increased economic activity in markets such as India and China. Crude oil has been the most volatile of all major commodities during the crisis. We even saw negative oil prices due to the excess supply in the market as economic activity fell. In the long-term, however, much of the oil prices are controlled by OPEC – an organisation in the Middle East that determines the supply levels for the commodity. This adds a lot of risk that is not diversifiable. Weak USD has not helped the cause for oil either.
After somewhat of a stall in oil prices due to the supply squeeze by the OPEC, the oil market has now started to benefit from the improvement of economic condition globally. The emergence of a vaccine and the return in economic activity, it may be a good time to look at some of the top oil stocks ASX has to offer.
Looking for Growth Stocks?
Growth stocks are potentially one of the hardest to pick as there are a lot of factors that need to be considered – from industry tailwinds to financial health of the individual stocks, and a lot of little things in between them. Shares in Value research team have picked their top 3 ASX stocks to buy in 2021. Click here to download the report for free.
