Sunday, October 18, 2015

Why Oil Companies are a good bet

Below is a summary of a you tube video sent by Zurich - justifying their long term position in Oil Stocks - interesting read!

1.  Demand exceeds supply - 
75pc usage of oil on transport - and massive shift of people in BRIC countries from lower class to middle class - is seeing them increase their demand for motorbikes and cars - and hence oil (watch out environment!)

2. Producers are more efficient - oil companies are more profitable at $50 than 3 years ago when oil was $85 a barrel

2. USA now supplying as much oil as Saudi Arabia, whose markets are now threatened - they reduced prices to get USA companies out the market - but this didn't work - USA companies actually came to the party and increased production .

3. There are many factors that will potentially make oil price go back to $100 per barrel and more ! Political instability,  government intervention, scarcity to name a few 

Short term oil price - low
Long term - they think will increase 


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