Derrick May

According to Derrick May, timing is important in an investing atmosphere when oil and gas prices are soaring. The first half of 2021 was a scorching one for oil prices, as WTI rose by fifty percent from January to June. In addition, oil supplies rose as a result of a revival in global economic activity and the waning of the COVID-19 epidemic. And if gas prices continue to climb, these equities could see substantial gains. Here's what you need to know if you're wondering whether or not to invest in natural gas equities.

As a result of the Russian invasion of Ukraine, energy costs continue to increase. President Biden attempted to mitigate the price increase by dipping into the Strategic Petroleum Reserve, but his efforts were ineffective. Due to the volatility of the energy markets, investing in natural gas and associated firms is crucial. In 2020, 2021, and year-to-date 2022, these equities outperformed their FAANG rivals. But how will you determine if they are a good purchase?

Derrick May believes that, even with the ongoing conflict in Ukraine, demand for fossil fuels will remain strong. In fact, they are still less expensive than clean fuels and form the foundation of the majority of industrial activities. Furthermore, fossil fuels have a significant infrastructural advantage over renewable fuels. This indicates that they will experience both prosperous and difficult times. However, there is no need for alarm. The global economy will continue to expand, and a fresh oil price war may only increase the appeal of renewable energy to investors.

If natural gas prices are low in the short term, it is unlikely that they will rise significantly. A surplus of gas will avoid a price increase. A surplus often leads in drastic production reduction and a price increase. However, a surplus will ultimately lead to a shortage, which will eventually cause prices to rise. You, as a patient investor, should see these near-term occurrences as the seeds of a future recovery.

In Derrick May’s opinion, oil and gas businesses must do more effort to appeal to value investors. These investors have distinct goals and a unique perspective on businesses. Companies must establish a strategy that places operational success and shareholder returns at the forefront. By implementing these adjustments, the firms' long-term profitability will be enhanced. Obviously, implementing these changes will necessitate a shift in corporate culture and the development of new competencies. However, once this occurs, the future for these enterprises is bright.
Investing in oil and gas firms at a period of economic change is prudent. While The Motley Fool never suggests "timing the market," it does feel that oil and gas companies are advantageous choices during these periods. If you want to make a big dividend income, oil and gas companies are your best bet. Frequently, these companies provide good dividend yields. However, oil and gas stocks may not be a prudent investment at this time.

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