# If things crash, how would oil do in 2022-2023?



## Buckwheat (Dec 11, 2021)

The point is that oil iis charging up right now because of supply fears. In my opinion those fears are almost entiirely based on COP26 and its aftermath, namely activists screaming about disinvestment and having some success. There are other modifying factors such as technical supply problems and whether the Saudi oil minister had a fight with one of his concubines or whatever, but the oilers are ready to pay out dividends rather than drill new projects. With the sudden bump up in prices, there may just be some new drilling, we'll see. In any case, supply is tight and prices are going up; but there are also headwinds for the economy & stock market, and in the past two days there have estimates of a pull-back coming, anywhere from 10 to 50%. My question is this: given that oil is going up because of tight supply, if those supply problems persist and if we go into a fairly serious downturn for say 6 months or a year, will oil prices and stock prices stay high, despite the downturn? I'm thinking that even if there is a downturn, the world still needs a certain amount of oil to keep running, and if supplies stay tight, oil may buck the trend and stay pricey, even if the wider economy and markets sink a bit. What do you think? Eh?


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## nobleea (Oct 11, 2013)

So many factors at play. Oil production is undercapitalized at the moment to maintain production. Russia invades Ukraine and it will likely get it's oil exports sanctioned. Omicron wave dies down quickly and travel returns full bore.


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## doctrine (Sep 30, 2011)

The oil story is primarily demand, so of course a major recession could impact it, but demand is already still being suppressed by COVID to a degree, especially air travel, yet here we are at $85 oil. If travel restrictions lift, and all indications are that we are heading to a very strong summer travel season, then demand is most likely to be higher than last year. The downside isn't that big - oil stocks are already cheap, have already paid down a lot of debt, and capital spending is already low. So they could sit longer at lower oil prices and not be in any serious risk of financial difficulty. On the other hand, you have free optionality for higher prices, and virtually every analyst and investment bank out there is now calling for $100+ oil. This year.


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## zinfit (Mar 21, 2021)

doctrine said:


> The oil story is primarily demand, so of course a major recession could impact it, but demand is already still being suppressed by COVID to a degree, especially air travel, yet here we are at $85 oil. If travel restrictions lift, and all indications are that we are heading to a very strong summer travel season, then demand is most likely to be higher than last year. The downside isn't that big - oil stocks are already cheap, have already paid down a lot of debt, and capital spending is already low. So they could sit longer at lower oil prices and not be in any serious risk of financial difficulty. On the other hand, you have free optionality for higher prices, and virtually every analyst and investment bank out there is now calling for $100+ oil. This year.


 Another reality is the climate change policies . They impede supply .


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## zinfit (Mar 21, 2021)

zinfit said:


> Another reality is the climate change policies . They impede supply .


I have had some excellent results with my 8 oil and gas stocks when the market is having a bad day. Really good today,some are up 6%


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