Do all questions in this world have answers? If does, then one is asked to answer whether the huge drop in the price of oil provide an opportunity for the contrarian investors to cash in. If this is not the case, then will the period of cheaper oil rates get longer, and consumers will find it great news. But on the one hand, while this drop in the price of oil seems to be great for the consumers, shareholders are having the worst days of their life. However, history has something else to answer all these questions. Starting from the last summer, the price of oil per barrel has fell from more than $100 to less than $50 within the gap of just six months. The similar drop was once found way back in 2007 when there was a steep drop in the entire economy and the Global market was hit by the recession. Experts have always believed that the drop in the price of oil is synonaymous to the drop in the demand in the market, and the desire of the people to do business in oil.
Cody Winters is a name who has been a top notch analyst in the investment industry. In fact, his company Southlake Resources Group has been formed by professionals, all of whom are experts in dealing with the investment market strongly, and knows what to do and when. Especially when the oil market has been dealt with, there are several factors to consider before coming up with new strategies, and more efficient they are, the better it is for the investors as far as the profit margin is concerned.
The latest decline in the oil rates is a result of multiple factors that have worked in tandem with each other. The demand in the entire world market is sluggish, noteworthy in Europe, Japan and in China, where the growth of the GDP in the ongoing year is considered to be lower by almost three percentages than the previous few years. But, technology has never stopped progressing, and hence there’s an immense improvement in the drilling technology. As a result of it, the production of oil in the U.S. has increased giving a major boost to the entire supply of oil.
While investment policies during this phase were being talked of, Cody Winters of Southlake Resources Group has always suggested that individual investors must not go for purchases of the commodities, since the volatility and unpredictable nature of these items cannot be matched. But while buying the oil stocks, these factors need to be dealt with a different angle. Since the exposure of these oil firms and the gas prices keep varying the chances of fall abruptly at one go reduces, and hence along with it reduces the risk factors as well. Although the current market finds a steep fall, experts believe that the demand will eventually revive, but there is a vast supply to match the level easily. Still, even with a level or slowly rising price, there’s a lot of money to be made in the energy business as companies gets smarter about cutting their extraction costs.