Many of us recall the oil crash of 2014, when oil prices went from soaring highs to plummeting lows seemingly overnight.
At the time, many were shocked by oil crashing after years of stable growth.
Now, 4 years later, it seems oil’s stock may be recovering, bringing in revenues of nearly a billion dollars per day.
If you’ve been wanting to get back into this money-making industry, now may be the perfect time.
To fully understand why this may be the perfect time for oil, you need to understand what made it plummet.
To see what happened in 2014, we need to travel even further back in time to the early 2000s.
The first decade of the 21st century saw oil prices skyrocket across the globe. This was due to a number of very strong global economies, including the U. S. and China, who were growing rapidly, requiring large amounts of oil to power that growth.
In July 2008, the price of oil reached an all-time high at $147.30 per barrel.
For a time, it seemed the price of oil could only go up as countries continued to grow and develop rapidly.
However, although global economies continued to grow, the rapid rate of growth that had characterized the start of the 21st century began to drop off after 2010.
The same global economies that had driven the price of oil so high in the first ten years were the same ones letting it drop so low now that their demand had declined.
What resulted was a classic case of far too much supply coupled with an ever-decreasing demand.
This caused the price of oil to go down, resulting in cheaper gas prices, and plummeting stock. In June 2014, oil had been $115/ barrel. By January 2015, oil was $49/ barrel.
That means the price of oil fell 58% in less than 7 months.
This is an interesting case of industry insiders failing at predicting how a stock would do.
Because oil prices had been going up for so long, no one thought they would ever come down, and particularly not as significantly and quickly as they did.
So, if even the industry insiders failed to predict the future of oil stock, what makes me think I can do any better?
Well times have changed and we’re living in a vastly different landscape than four years ago.
Unlike then, when we were importing most of our oil from other countries, the U. S. is now the largest producer of oil in the world, at 14.9 million barrels per day.
That allows for greater stability, since we no longer have to rely on other countries, like Saudi Arabia, for our oil.
In 2017 we saw U. S. producers of oil increase their production while managing to still keep costs down, as well as an increase in demand that should mean prices start moving higher.
Enough time has passed, along with great new production, that there is no longer that massive divide between supply and demand.
Now I’ve given you a ton of background information on the oil industry for context, and so that those of you who remember the oil crash of 2014 aren’t scared off from investing in oil now.
For 2018, energy-sector analysts predict that the industry as a whole will see a growth rate of 37.94% this year.
Let’s take a look at the stock chart for U. S. oil.
The recent tumbles in early February can be attributed to the market freak-out and can be expected to recover nicely.
Overall, we see a steadily increasing chart that has been gaining in traction in recent weeks.
Even if you’re ready to reenter the oil investing game, it needs to be the right stock.
That’s why I’ve brought you Smart Sand, Inc. (SND)
SND is involved in the excavating, processing, and sale of industrial sands that are used in hydraulic fracturing operations in the U. S. oil and gas industry.
SND has been in the news recently due to its market price allegedly being lower than its “true valuation.”
I phrase it that way because the number one rule you must remember when it comes to the stock market is that market price is never under or over a stock’s “true valuation.”
A stock is worth what people are paying for it at that moment—no more, no less.
However, those flashy headlines aside, SND is a strong stock that we can expect to go higher soon and is currently at a lower price than its comparable peer stocks, making it an attractive option.
Just imagine if oil gets back up to its 2008 high of $147.30/ barrel, with the U. S. now producing 14.9 million barrels a day.
You could be part of an industry making nearly $2.2 billion PER DAY.
Currently, oil price is at $65.45 per barrel.
That’s already revenue of $975 million a day, and only going up.
If you’ve been wanting a piece of the oil industry, but afraid about jumping in, SND is a good place to start.
I’ll be tracking the U. S. oil and gas industry and keeping an eye on demand which will hopefully shoot the oil stocks back up.
I’ll keep you updated on the latest developments and stock picks so that you can have a piece of this money-making industry.
