4.10 - oil pulls all of the attention
Oil is the main topic for our discussions today.
Almost unprecedented growth of oil crude in the recent days has been putting a lot of pressure on traders as Iranian sanctions, promised by the United States are looming over the industry. Four-year-high reached by the cruse yesterday slipped away from us today as Russia and Saudi Arabia claimed that they were planning to increase the output numbers.
Futures for Brent fell 0.2 percent but right now there is no common opinion on what the future holds for the oil prices. There are different views on the prices in the nearest future. some say that the price is going to skyrocket back to $148 per barrel point, some think that $100 would be enough for the crude and some aim even lower – to $95 per barrel price. But the opinion that the oil is going to keep on gaining price is common.
Who would benefit from the pricy crude – the answer is obvious – the countries who produce it. Russia, Saudi Arabia, Venezuela, Nigeria and United States. That is why it may just be that the pressure out by Trump on Iran is far from political games. That might simply be another business move of American President in an attempt to do away with the rival. Putting sanctions on Iran is going to limit the quantity of oil in the market and create a deficit that leads to the gaining of the price by the asset.
The math is pretty simple on this one – oil extraction is a very expensive business in the United States – output of one barrel costs somewhere between 25 and 60 dollars. With barrel of the crude only costing around $60 no one is going to get into the trading. But up the price a little and you got yourself a profitable trading area which is extremely important for the United States right now.
So, we have Trump who tries to suffocate the competition as well as Russia and Saudi Arabia who want to up the output of their crude. War for the highest oil price is still ongoing. And it is possible for us to profit from the whole situation. For us the right scenario is betting on the United States. Trump has done a lot of things wrong but he was always acting in order to protect interests of the United States and it doesn’t seem like an area that he would back out of the fight in.
Today the oil is slipping but the news come not from the output numbers, but rather from a number of the countries rejecting oil because of the high price for the crude. India is getting ready to dig into her oil savings, Brazil and Malaysia and subsiding gasoline and Indonesia wants to impose new limitations on the national oil importing countries. All of this is causing turbulence and fall in the prices for the crude. But overall there is no reason for the prices to go down at this point.
Although oil can hardly be seen as a safe haven in trading right now, it is better to focus on the crude than on the greenback, that is jumping from every shake.
Oil, going straight towards $100 per barrel price might have been the best thing that could happen to the electric cars manufacturers in the present moment. With so many companies investing enormous amounts of money in order to switch to manufacturing of electric cars, oil, climbing to enormous heights is better than anything right now.
We would bet that we are about to witness the blooming period for the manufacturing of electric cars. Oil prices are not the only ones that are going up at the moment. Fuel is consecutively also going up and we are thrilled to see that people are going to refuse regular gasoline cars in the nearest future in order to switch to the cheaper option – electricity.
Four-years-high, hit by the fuel least month didn’t help the car industry. Of course, people still buy regular cars. The demand there is not going to go away right away. But investing in companies like Teals is something that is worth looking into right now. And pretty serious as well. The companies that announced their issuing of hybrids or electric cars are going to see a huge rally in 2019.
Here we are going to see two opposites. People who bet on higher prices for oil and people who bet on electric cars manufacturers. And we think that both of the sides have all the chances in the world to profit in their respective chosen field. Sales for Honda-, Audi-, Mercedes- and BMW-produced electric automobiles are about to skyrocket as Iranian sanctions are coming closer and closer.
In the last quarter the sales for the electric autos grew by 77 percent. And that was before the sanctions were announced. We still are to see what the number are going to be by the end of the year, only then we will be able to make a prediction more accurate. But we are saying with a real confidence – we are to witness the surge of the companies, that decoded to switch their main focus towards eco-friendly cars that is for sure.
Demand for the electric cars is already higher than the supply which means that there is no place to go from here but up. And the stocks and shares are agreeing with this point of view.
- by Anna K.