The oil market may seem complicated to those not in the industry, but what impacts oil prices is fairly simple. Three major factors—supply, demand, and geopolitics—drive the price of oil; all three also have an effect on oil giants like ExxonMobil (XOM - Free Report) and Chevron (CVX - Free Report) , and their bottom lines.
Supply refers to the amount of oil available, which has historically been determined by countries in OPEC. Recently, the U.S. has ramped up its oil production, and if these regions pump out a lot of oil, supply will then be at high levels.
Demand is determined by how much of a need there is for oil. For example: if a region starts experiencing more economic growth, a higher need for heat, electricity, and transportation will likely follow, resulting in more demand for oil.
Then there’s geopolitics. If there is war or conflict in an oil-producing region, crude inventories could seem under threat, altering the price of oil.
Most investors follow West Texas Intermediate (WTI) or Brent crude prices; West Texas is a kind light crude that comes from the U.S., while Brent crude refers to oil from certain oil fields in the North Sea.
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This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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The oil market may seem complicated to those not in the industry, but what impacts oil prices is fairly simple. Three major factors—supply, demand, and geopolitics—drive the price of oil; all three also have an effect on oil giants like ExxonMobil (XOM - Free Report) and Chevron (CVX - Free Report) , and their bottom lines.
Supply refers to the amount of oil available, which has historically been determined by countries in OPEC. Recently, the U.S. has ramped up its oil production, and if these regions pump out a lot of oil, supply will then be at high levels.
Demand is determined by how much of a need there is for oil. For example: if a region starts experiencing more economic growth, a higher need for heat, electricity, and transportation will likely follow, resulting in more demand for oil.
Then there’s geopolitics. If there is war or conflict in an oil-producing region, crude inventories could seem under threat, altering the price of oil.
Most investors follow West Texas Intermediate (WTI) or Brent crude prices; West Texas is a kind light crude that comes from the U.S., while Brent crude refers to oil from certain oil fields in the North Sea.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.
This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
See their latest picks free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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