Crude Oil Price

Crude oil prices began the week lower as a result of the start of a lockdown in Shanghai due to a high number of Covid infections, rekindling concerns about a loss of oil demand in the world's largest importer.

But this view is over exaggerated, as Covid - 19 vaccination will prevent a 2020/2021 like situation. Hence, I don't foresee a large fall in demand for crude oil, especially as the oil guzzling counties like India has started to see a demand spike. 

Above is the three months chart of Crude Oil (WTI) price from Investing.com.

Meanwhile, in a rather volatile trading session on Tuesday, crude oil prices rebounded and rose, despite the fact that Ukraine and Russia were heading for peace talks, and demand concerns remained as China shut down its financial hub in Shanghai to stem a surge in coronavirus cases.

While the benchmark Brent crude oil price fell early on Tuesday, extending losses from the previous session, it recovered and was last up nearly 0.4 percent to trade around $113 a barrel, after falling as low as $109.97.

Interestingly, a shortage of Russian gas caused by traders' reaction to Western sanctions against Moscow has hereto kept the crude oil prices above $100 and is likely keep it there for the foreseeable future unless the sanctions regime changes. And be informed that $100 - plus per barrel is a very good price for the upstream oil companies to sell thier commodities. Photo: Investing.com.

According to the Wall Street Journal, we are only now beginning to see the first effects of the sanction boomerang, as oil deals have been disrupted. This is likely to have cascading effects and will catalyse the crude oil price, to stay at elevated levels.

In such circumstances, accumulate the shares of oil exploration and drilling companies, like Jindal Drilling Ltd (Rs.234.70), ONGC (Rs.171), Selan Exploration Ltd (Rs.190.30), Reliance Industries Ltd (Rs.2622.85), Alphageo Ltd (Rs.312), Asian Energy Services Ltd (Rs.112) and Aban Offshore Ltd (Rs.46.65).

I'm expecting a  repeat of Gulf War (US Vs Iraq)  case, when the share price of Alphageo Ltd shot up from less than Rs.10 to Rs.700 plus. The stock of Jindal Drilling has already hit the Upper Circuit, today.