zSplit

Crude Will Surprise Everyone in 2020

Long
FX:USOIL   CFDs on Crude Oil (WTI)
Contrary to what people have been talking about for the past, really, 12 months about crude plummeting to 30 bucks, in reality, this will not happen and Crude will steadily rise in 2020 and perhaps even a good portion of 2021. Of course, there will ALWAYS be good short opportunities but I focus on mid/long-term trends for those who follow my ideas.

There are several reasons for this and to capitalize on this Crude push, people should invest in Canadian energy stocks such as: Enbridge , TRP , Canadian Natural Resources and Suncor. In fact, many of these stocks I have listed are up over 15-20% this month alone and will continue to surge in 2020.

It is important to realize Crude will NOT rise based on demand, but rather other key factors. Demand is still imperative (most cars, planes, military equipment, trains, etc), but obviously, the demand is lesser compared to a decade ago. However, other things are in play.

Key Points:
1) Saudi Aramco IPO has created international interest again in the sector
2) Saudi's will decrease oil production to inflate crude prices again which will decrease US surplus inventories
3) Weakness in the DXY will continue to drive commodities up quite steadily in 2020 and likely even in 2021 as a result of further QE /liquidity in the markets & weakening economic conditions again from Q2 2020 & further rate cuts in 2020 contrary to what people ignorantly believe
4) There is no recession happening in 2020 which in-turn will drive commodities up inherently

Why Canadian Energy will be a Winner:
1) Many of the finest energy stocks are of Canadian descent
2) Many top Canadian companies have announced a significant increase in cap-X for 2020 (and increase in dividends - hikes)
3) There has been an astronomical flood of volume in these stocks over the past 1-2 months
4) Low P/B and low P/E ratios will push international and domestic investment into the sector as big money searches for strong value as it acknowledges we are in a "melt-up" which will last for the next 8-12 months
5) This acknowledgment of the US (and world) equity markets being in a melt-up continuation for most of 2020 will be a reason why Precious Metals will also be a bonafide winner alongside crude and other commodities . This can be seen with a strong finish in the metals in 2019 and why options traders show significant volume for the long-term contracts in the metals for a continued bull run several months out

I focus on the mid and long-term trends. Not day-to-day trading. Day-trade at your own risk.

- zSplit

Comments

Very well done article on energy.
Thank you,
+2 Reply
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