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May
21
John Murphy
Putin’s Deal Shows Appeal of Energy Stocks
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It has been a strong market for oil and natural gas stocks ranging in size from blue chips such as ExxonMobil (NYSE: XOM) and Royal Dutch Shell (NYSE: RDS-A), the two biggest in the world, to promising small caps such as Mondial Ventures (OTC: MNVN).

The recent $400 billion natural gas deal between China and Russia should make the market even stronger.

Russian President Vladimir Putin is attempting to put pressure on Europe with this deal with China.  Russia is the largest supplier of natural gas to Europe. From that, prices will rise.  Already the exchange traded funds for natural gas, United States Natural Gas (NYSE: UNG), and United States Oil (NYSE: USO) (chart below), have been strong in recent market action.  Putin’s action will be even more bullish.

It will be the same way for individual stocks such as ExxonMobil, Royal Dutch Shell, Mondial Ventures, and others.

Global energy demand on its own is enough to make these stocks appealing.  Oil is the major form on energy in the world.  Natural gas is predicted to gain the most.  Those with operations in North America such as Mondial Ventures are especially attractive due to the risk factors.  Coal will decline in usage due to it being too dirty.  Alternative energy stocks are not viable enough for widespread usage.

That is why Putin rushed into a deal with China even though it does not have the infrastructure to have such a huge massive infusion of natural gas.

That will keep investor demand high for oil and natural gas stocks.  ExxonMobil, Royal Dutch Shell, and other blue chips have done very well in the bull market.  Sentiment will eventually shift to small caps like Mondial Ventures.  But the actions of Russian President Vladimir Putin will do much to keep th entire oil and natural gas sector appealing to investors.

 

 



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