Since the pandemic lows, crude oil prices have soared, returning to levels not seen in nine years. The United States Oil Fund ETF (USO), a popular proxy for crude oil, has had a breathtaking march higher since reaching panic lows in April 2020. As news of the COVID-19 pandemic spread and worldwide governments responsed with lockdowns, crude oil futures briefly flushed to negative prices. However, as countries began to reopen and pandemic-related stimulus dollars flooded the economy, oil prices rebounded and never looked back. USO shot higher from a low of $16.88 to $70 today. Despite the impressive multi-year move, prices have been stagnant over the last six months, with USO falling nearly 5%.
Several factors have contributed to the rise in prices and the subsequent stagnation. Has the oil sector topped, or is it simply taking a breather? I believe the former. Below are five reasons why the oil industry will thrive over the next year.
Egdon Resources plc (LON:EDR) is an independent onshore focused oil and gas exploration and production business. An established oil and gas exploration and production business with 41 licences in proven oil and gas producing basins in the UK.
