Key takeaways
- With oil prices dropping, it’s clear that oil as a commodity can be highly volatile since it’s strongly tied to supply and demand, along with other global factors.
- With fears of a recession, soaring inflation and aggressive rate hikes, it’s unknown what the future holds for the economy. Consequently, there have been numerous stock market sell-offs this year.
- When energy prices go up, it’s expected that companies in the energy sector will enjoy higher revenues. We saw this during the post-pandemic boom when folks returned to everyday life and resumed traveling.
Oil prices soared during 2022, and energy stocks increased while the rest of the markets became turbulent.
Generally speaking, oil can be highly volatile as a commodity and oil prices will influence the value of oil stocks. Oil prices have been impacted by fears of a recession, the Russian invasion of Ukraine and the production cuts we saw in October.
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