Business

The attack on Saudi oil infrastructure and the future of oil prices




Following an incident that included attacks on two separate Aramco oil plants in Saudi Arabia earlier this month, oil prices saw an immediate increase. Prices have softened sharply since the attacks, but the price of crude oil is still higher than before the attacks. The market's immediate and strong reaction to a possible decline in supply highlights the fragile nature that is evident in the oil markets and pricing.

Any extra tension or uncertainty in the region could push prices much higher in the future. This scenario will benefit US-based Parsley Energy (NYSE: PE) and given the strong pressure on Iran by many US consumers and political experts, those interested in investing wisely , take into account .

  A fracking drilling rig

Image Source: Getty Images

A promising frontier

Parsley Energy is an independent oil and natural gas company located in the very rich Permian Basin of Texas and New Mexico, and was Founded in 2008. This company's second quarter revenue ended June 30, 201[ads1]9 was $ 0.499 B, which was a 6.57% increase the year before. For the twelve months ended June 30, 2019, revenue was $ 1,892B, up 33.9% from a year earlier. Persley's profit margin as of June 30, 2019 was 13.69%. According to Parsley's second quarter results, business is also booming. "Net oil production increased by 10% quarter over quarter and 28% year over year to 86.6MBo per day. Total net production averaged 140.1 BBoe per day," a recent press release shows. These improvements are remarkable because still higher production indicates stronger future growth.

Persley's management is also set to increase the free cash flow, an important factor for any investor to consider. The company's free cash flow discipline is admirable, and assuming that oil prices remain fairly stable or go higher in the future, Petersley's economy will only improve due to increased profit potential. In light of this goal, Parsley announced in August a $ 0.03 quarterly dividend to be paid to investors starting this month. Both of these factors should encourage investor optimism for both economic health and growth opportunities in Parsley.

There is still uncertainty approaching

Still, there are many factors that affect the pricing of oil. Few have to do with the natural occurrence of supply and demand or free markets. Governments, states and even companies can interfere in the markets, mostly on the basis of geopolitical interest and money. This is a very complicated matter, and these unknown factors certainly play an important role in the world's oil markets. This is why it's always a good idea to look at the big picture, rather than just focusing on the numbers. By doing so, regardless of personal or political conflict, one can make a better decision about personal finance and investment.

Given the increasingly uncertain geopolitical climate, volatility seems to be the rule of the day. Threats may arise in the Middle East for more about the Iran / Saudi conflict, trade war and tensions between Iran and its other opponents, and wreak more havoc on the oil markets. Should more attacks occur, or war against Iran become a reality, the offer could be threatened and not just temporary. In that environment, oil prices would rise significantly in my opinion, and it would certainly generate higher demand for US-based parsley energy that is already positioned for long-term growth.



Source link

Back to top button