It is time to come with an oil stocks update. Since the OPEC meeting late November 2016 the oil sector been closely watched by the investment community.
In my December 4th blogpost I gave you a first take on the OPEC cut deal. My view was to buy into oil stocks if they started running post deal. As you can see from the chart a pretty wise plan. The Norwegian oil stocks rallied 15% in a month.
Mid January I told you the oil price was stabilizing and there could be new rallies if the price started escalating. The oil price has been stable since and there has been some taking profits.
In “Norwegian performers – Oil stocks” I outlined a possible oil price scenario. The OPEC cuts resulting in a higher price would lead to increased production in the US. This is exactly what international media is reporting these days. We have a situation with a stable oil price.
We have been waiting for the oil price to pick up. The stable price been somewhat of an oil stock rally hindrance.
This AkerBP the best performing Norwegian OBX the last year. Even here we can see some resistance created by the present oil price situation.
The OPEC cut deal has so far been great for the traders more than for investors. We will stick to our original plan and buy in for sure when the oil price starts rising again. We must be on hold and buy in when a new oil stock rally commences.