1 Green Flag and 1 Red Flag for Rallying Oil Stocks
The global coronavirus pandemic has upended economies and industries in massive ways. One sector that has been whipsawed by the illness is energy, which was out of favor and now has come back sharply. Investors should take the positives of today with a massive grain of salt, though. Here's why energy stocks look set to continue posting strong results, and why that could set up the industry's next downturn.
When the pandemic first hit in 2020, one of the key responses was for economies around the world to effectively shut down. Non-essential businesses were closed, people were asked to socially distance, and employees who could work from home did so. That resulted in a decline in demand for oil and natural gas. Investors reacted to that by selling shares of energy sector names, including even financially strong giants like ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX).
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Source Fool.com
