Via ZEXPR, With the introduction of various vaccines into the general population, many countries have begun to ease their lockdown restrictions with a few exceptions. However, the return to normalization has resulted in the stock market regaining some of the ground it had lost in the past few months as a result of the pandemic. The NYSE saw record growth before the initial lockdown procedures were set in place. Come March 2020, many of the tradable stocks took a turn and went into negative territory. While many eventually regained their footing after a few shortcomings, the one sector that barely saw any growth last year was oil.
Walton Chase analyst takes a brief account of the oil and energy sector while also evaluating the future prospects this industry has to offer investors in the post-pandemic world.
The Energy Sector
After the lockdown was initiated many companies were hit hard mostly due to the drop in price of oil and the reduced demand since many countries were more focused on investing in their health care systems instead of searching for oil and gas reserves.
It’s no secret that oil has undergone extreme devaluation per barrel in the past couple of years and has steadily lost ground although it has hit peaks as well. At the beginning of 2020, oil was doing relatively well with prices expected to stay steady since most of the data indicated a steady growth. When the WHO officially declared the coronavirus outbreak a pandemic, the stocks that saw the most growth were pharma companies, cleaning products and other hygiene-related industries. This resulted in many investors abandoning support for oil and turning to the hottest stocks available.
Oil production was able to continue with companies like Allied Energy Corporation maintaining the operation of their existing oil wells. Allied Energy has sustained its primary business model by offering a compelling upside for its potential investors in terms of environmentally friendly practices being adopted by the company that are not just beneficial for the environment but also help in terms of profit capability.
The company chose to go with implementing secure environmentally friendly practices instead of wasting millions of dollars in the exploration of new oil reserves and hurting the environment. Allied Energy has been able to maximise the outputs of its existing oil wells in anticipation of an oil rise in the coming months.
Going Back To Normal
As the world moves steadily towards a return to normal life, many of Allied Energy’s oil wells have increased their outputs to accommodate the increased demand that is to come in the post-pandemic world. Oil is seeing a comeback with incremental additions to its overall valuation. Allied has eyed its expansion in the scientific sector with millions of dollars of investments in research and development and also in optimizing the performance of individual oil wells that operate at different capacities while trying to synchronize each well to output the required amount for any specific time.
Most of the methods used include monetizing the shut-in gas and oil wells across their claims and generating revenue from such places instead of wasting money in exploration at a time when oil has been at its most critical point.
At the beginning of 2021, there were high hopes for normalizations and a return to market conventions. While there have been significant boosts to the total valuation of individual assets related to oil, there is still a long way to go before oil regains ground.
With the 2nd quarter of 2021 already in motion, oil has seen a sudden uptick in its demand. This is because of the release of several vaccines by pharma companies. The vaccines symbolize a universal sense of normal life with many industries already moving towards a post-pandemic mindset and investing in their specific industries. The same goes for oil. Oil saw a steady climb before the 2020 lockdown and it is safe to say that it will continue its rise through 2021 even after a few shortfalls in late 2020.
The Predicted Oil Boom
Energy companies have been reluctant to release their numbers but the 1st quarter of 2021 has shown promising growth in the oil sector and Walton Chase analyst predicts that oil will go up in the coming months since many countries held off during the pandemic, and oil essentially had to be given away while the world was in lockdown since companies could not risk halting production. This is because once a production system is shut down, it costs a lot of time and money to restart it and even then, it is difficult to reach maximum operating capacity within a short timeframe.
This is exactly what might happen in the coming weeks because even though companies did not halt oil production, they did decrease exploration which in turn affected their production capacity. In a few short weeks, the oil will likely go up according to recent data results since demand is already increasing. It has reached a point where it is quite difficult to state accurately how much oil will go up considering it is merely continuing its streak from 2020 but things are looking better for the energy industry as a whole.
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