Is Now the Time to Buy Oil Stocks?
There's an interesting dichotomy taking shape today in the energy sector. Oil prices have fallen lately, but the stock prices of oil producers like ExxonMobil (NYSE: XOM) have remained fairly strong. Given the tie between the price of oil and the profits of oil companies, that suggests that now is a time for caution. Here's a deeper look at why.
In 2020, governments around the world effectively shut down their economies in an attempt to slow the spread of the coronavirus. That resulted in a swift drop in demand for oil and natural gas. The energy industry was hit very hard, with oil prices in the United States actually falling below zero for a brief moment in time. Although this was a short-lived event, think about what it means -- producers were paying customers to take oil off of their hands.
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Source Fool.com
