Optimism is an important trait in online stock trading and investing. But you need to also keep your mind open to the possibility that things could turn out to be not as rosy as you and many other traders, investors and analysts thought them to be. Markets are often unpredictable.
Crude oil prices have gone through a rebound this year after the initial lows, and that has helped lift energy investments. Crude oil is currently trading somewhere between $40 and $50 per barrel, which is a long way ahead of the less than $30 per barrel it was trading for as the year began as a result of too much supply in the markets globally. Though the supply and demand imbalance remains, it has subsided to a large extent. Chevron ($CVX) and Exxon Mobil ($XOM) are among the major oil producers that posted double-digit gains in 2016 following the sharp losses they experienced in 2015.
The iShares iBoxx $ High Yield Corporate Bond ETF ($HYG) also posted gains. Crude oil market analysts use the ETF as a substitute for energy-debt investments since energy companies in the shale oil boom segment use high-yield debt for their funding.
The strength in crude oil prices as well as energy investments is the result of expectations of supply and demand getting back into balance. That indicates the price will further rise beyond the current levels. Gasoline demand in the US is at a record high according to the Energy Information Administration of the US Department of Energy, and this is because of the cheaper prices.
However, the International Energy Agency claims that growth in global oil demand is slowing much faster than predicted. The demand may keep slacking in 2017 because of uncertain macroeconomic conditions lurking beneath. That could adversely affect the supply and demand balance that market analysts are counting on, which could hit energy investments big time, as this article indicates.
Being prepared for any eventuality is an essential trait in online stock trading. For that, you need experience as well as a clear view of the markets you’re trading in. With TradeZero’s state-of-the-art trading platforms, you have a ringside view of the market even when you’re trading from home. Give us a call at +1 954-944-3885, or just email us at email@example.com.
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