August 7, 2023 [Energy Portal]- Industry experts are predicting a rise in oil prices due to strong oil demand and supply limitations. With this potential for price increases, oil stocks BP p.l.c. (BP), YPF Sociedad Anónima (YPF), Koninklijke Vopak N.V. (VOPKY), and Transportadora de Gas del Sur S.A. (TGS) are recommended for investment.
The energy industry has demonstrated resilience despite economic and geopolitical challenges in various sectors. The recent surge in oil demand, coupled with supply constraints, is expected to provide continued growth and support for the energy sector.
Global oil demand is projected to increase in the third quarter of 2023, driven by international air travel and the summer driving season. China and India, the largest and third-largest oil importers respectively, are expected to contribute to the growth in oil demand. Analysts from Goldman Sachs anticipate a record-breaking rise in global oil demand, reaching 102.8 million barrels per day (bpd) in July.
On the supply side, significant production cuts from nations like Russia, Saudi Arabia, Angola, Libya, and Nigeria are expected to limit oil supply. Many commodity analysts believe that oil prices will continue to rise, with experts predicting Brent’s price to climb to $93/bbl in the fourth quarter of 2023.
In addition to market dynamics, the recent G20 Energy Transitions Working Group meeting highlighted the global reliance on fossil fuels despite calls for a transition to cleaner energy sources.
Given this backdrop, oil stocks such as BP, TGS, VOPKY, and YPF are considered favorable investments for August. BP, for example, has demonstrated strong fundamentals with positive financial indicators, including a growing dividend and share buyback program.
YPF, based in Buenos Aires, Argentina, is also a promising investment option in the oil and gas sector. The company engages in the exploration, production, and refining of oil and gas.
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