Oil prices have been volatile within a fairly tight range in 2019. In many ways, the year has been a recovery from the previous year in which the price plunged in November. Several news events have caused the price to be shaky throughout the year, such as Trump’s tariffs and trade wars, Iran sanctions, and the United States stepping up production on domestic shale oil. Here are some important points to know about gas and oil in August 2019.
State of Oil Production
A recent Deloitte survey found that executives of oil, gas, and chemical companies were confident about industry growth in 2019. Although the overall market has been volatile during the summer of 2019, investors should take note of the trading opportunities in the $55 to $65 price range of crude oil. The Dow has fallen from its record high this summer mainly as a response to President Trump threatening additional tariffs. These tariffs drive up business expenses even for U.S. oil companies. The oil and gas industries are vulnerable because of the need for specialized steel for refineries.
One of the main energy issues in 2019 is sustainability. Several reports are starting to show that renewable energy is beating fossil fuels in cost efficiency. Investors are becoming increasingly interested in sustainability, which affects a corporation’s image and balance sheet. Cutting energy costs is now a top priority among many large corporations. The oil industry now faces tough challenges for competing with solar and wind energy in the future. Keeping up with oil and gas industry news is essential for oil investors.
Oil Companies Diversify
Several oil and gas companies are fighting renewable energy companies, while others are investing in them. The firms investing in solar and other forms of alternative energy will be well prepared for the growing revolution toward sustainable solutions. Oil survivors will be those that consider themselves to be energy rather than oil companies. They will embrace the inevitable shift to electric vehicles (EVs). Several states in the United States are setting goals for renewable energy, so sustainability is not an issue that’s going away.
At the moment, oil is still the backbone of the global economy and often moves with the broader market. Investors should expect more price volatility due to political uncertainties that affect oil production.
About The Author
Anatoly Vanetik is a Venture Capitalist, Oil and Gas Expert, and Businessman in Orange County, California. He is the President and Chairman of the Board of Directors at Vanetik and Associates, a popular venture and consulting firm in the resource industry that Anatoly began. He brings many years of professional experience in the engineering and energy industries. Outside of his career, Anatoly Vanetik is passionate about animal welfare and art history, and maintains monthly blogs about each one.