Oil prices are gushing higher.
Last checked, WTI crude was up about $1.60 to $75.01 and could push higher.
For one, demand could exceed expectations, if the economy shows further signs of growth, which could result in a deficit. Two, there are tensions in the Red Sea, where “Houthi militants have vowed to retaliate over US and UK military strikes in Yemen, driving the world’s leading oil tanker operators away from the critical Red Sea trade route,” says the Financial Times.
There’s also tension between China and Taiwan, which could create a risk to supply. And there’s even tension between Iran and Pakistan. According to Reuters, “Oil traders also worried about geopolitical risks in the Middle East. Pakistan conducted strikes inside Iran, targeting Baluchi separatist militants, the country’s foreign ministry said, two days after Iranian strikes inside Pakistani territory.”
In addition, the International Energy Agency (IEA) joined producer group OPEC in forecasting strong growth in global oil demand as cold winter weather disrupted U.S. crude output while the government reported a big weekly draw in crude inventories.
That being said, investors may want to take positions in oversold stocks, such as Exxon Mobil (XOM), Chevron (CVX), and Occidental Petroleum (OXY).