Is Now the Time to Buy Oil Stocks?
The last three years have been very exciting for energy stocks, with deep declines and massive rallies. The driving force, as always, has been the inherent volatility of energy prices. This is actually normal, not unusual. Which brings up the ongoing question: Is now the time to buy oil stocks?
If you are looking at oil stocks there's a very good reason to be fearful. In simple terms, what goes up eventually comes down in a cyclical industry like energy. And with the world potentially on the brink of a recession, demand for oil could end up falling in very short order. That would put downward pressure on oil prices, which have run up dramatically since their pandemic-driven lows in 2020. That period, however, is important to understand because it was marked by a rapid decline in demand, which is what a recession would also lead to.
Image source: Getty Images.
Source Fool.com