International Finance
Oil & Gas

Oil prices are rising due to instability in the Middle East

Oil prices are on the rise after political instability in the Middle East, say traders, as energy stocks emerge as viable investment options and job opportunities in the sector look bright

The price of crude is going up as traders analyze and react to Middle East instability, according to Almost 50 percent of global oil reserves are situated within the Middle East. President Donald Trump recently imposed sanctions on Iran and these sanctions are at the heart of the instability. However, sanction-related “jitters” are sparking gains in global energy stocks, with drilling group shares showing the most growth. Furthermore, new employment opportunities in the oil industry are also emerging.

Drilling Group Stocks Show the Biggest Gains

Crude oil prices have been climbing for close to a year. According to the, the price of crude has risen by 66 percent since hitting a low of just over 42 bucks during summer of 2017. However, most oil stocks are not delivering the full 66 percent gain. A top performing group among the ten industry groups for oil is the drilling group, which has experienced gains of 38 percent, following oil’s 2017 “closing low”.

A lot of oil companies are involved with natural gas liquids and natural gas, which haven’t had the same gains as crude. This explains why share prices for many oil stocks don’t measure up to 66 percent. Contango Oil & Gas is one publicly-traded company that is involved with crude and natural gas. It’s been trading low when compared to many comparable “small cap” gas and oil companies.

Energy Stocks Are Affordable Options

According to Max Kettner of Commerzbank AG, energy stocks are quite inexpensive, but provide impressive earnings revisions and price momentums. Energy stocks are the globe’s leading sector in 2018, primarily due to oil’s rally, which has been accelerated by the new sanctions. Despite the good news, a Deutsche Asset Management equities expert, Britta Wiedenback, believes that cash returns need to be higher in order to build investor confidence in the energy sector.

Oil Industry Employment Opportunities Abound

The employment picture in the oil industry looks very bright. When “fifty dollar oil” returned, oil and gas hiring were stimulated. Men and women who want to work in this industry (or move up within the industry) are putting together employment applications, with a mind to scoring plum jobs in offshore drilling, oil field services and related niches.

No one knows for sure how long these sanctions will continue, but while they do, affordable energy shares with good gain potential will attract attention from investors. New jobs in the oil industry will also be an advantage of President Trump’s latest move against Iran.

What's New

Saudi non-oil business activity stumbles in May amid order slowdown

IFM Correspondent

OPEC predicts increase in global oil demand, IEA differs

IFM Correspondent

Oil might rise to USD 100 in Middle East due to conflict, warns World Bank

Leave a Comment

* By using this form you agree with the storage and handling of your data by this website.