Today I posted my one-hundred-ninety-sixth YouTube video: Trend of the Week Seasonal Trends in Energy
This week’s Trend of the Week: Seasonal Trends in Energy. There’s a predictable pattern in oil and natural gas prices. In late fall, October to November, you can expect a deep dive to begin and carry on through the winter, with a sharp rise in March and early spring. You can see this trend looking at previous years in the United States Oil Fund (NYSEARCA: USO) and the United States Natural Gas Fund, LP (NYSEARCA: UNG). Right now, we’re heading into that dip in energy prices but you should not sell – in fact, you should be adding to these positions. This seasonal fall in energy prices will allow you to get ahead of the spring bounce. Europe’s energy supply is enough to get through the upcoming winter but, in March, as they look toward next year’s supply, they’ll need to start rebuilding inventories in a market strained by the war in Ukraine, cuts in production, and a hostile OPEC. Stateside, the US Energy Information Administration is projecting record production from the Permian Basin of Texas and Oklahoma, as well as record production of natural gas this year. Even though we’re not seeing a whole lot of capital expenditure, they’re uncapping wells and pumping them harder. Look at USO and UNG as ETF oil and natural gas buys For individual stocks I’d look at Pioneer Natural Resources (NYSE: PXD), ConocoPhillips (NYSE: COP), and EQUINOR (NYSE: EQNR)–all of which I own in portfolios and have no intention of selling anytime soon.
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