There has been a decline in the oil stocks all over the world. This is due to the weaker consumer demand, coupled with the rising price of the dollar and thereby lesser corporate profits. It is said that the oil stock markets have hit their bottom. We all believe in the phrase, “oil prices low, great time to invest”. Is it really the time to invest in oil stocks?
Low oil price is beneficial for the global economy
In perspective to the global view, lower oil prices are actually beneficial. With the falling global oil prices, there is every possibility of global recession getting ruled out in the next few years. Hence, it can be said that lower oil price is an economic boost. Everyone benefits from the lower oil prices, even including the producers of oil.
How can lower oil prices impact the economy?
Let us find out the implications of lower oil price
- There is an increase in the global economic activity
- There is a reduction in the energy tax on the economic production. Hence, you can experience lowered cost of finished goods and services.
- Larger volume of oil will be turned into gasoline, which means there is lesser chance of economic loss.
Bridging the gap between the demand and supply of crude oil
It is the crude oil that influences the price rates of the oil stocks. The high production of the crude oil globally has led to a 50% price drop in the oil. It is the oversupply of oil that has caused a delay in the projects or cancellation in the oil companies. It is expected that the demand for crude oil will increase by 1.1 million barrels a day in 2016. Since there will not be a gap between the supply and the demand, the oil industry will benefit from the oil stocks. Thus, it also means with oil prices low, it is a great time to invest.
It is indeed a good time to invest
Once the price of the crude oil takes place, there will be a better performance in the oil industry. Because of the low oil stock price rates, the investors are in a better position to bargain and invest. The enticing dividends provided by the oil stocks yield also attract the investors. The increased dividend yields are due to the drop in oil stock price. Basically, the oil industry is in the position to make good investments. Thus, with it is an excellent time to invest in oil stocks and the Opteck Fraud Crude oil Commodities won’t influence much.