Over the past 12 months, crude oil went up by 73 from six to six dollars all the way to 115 dollars per barrel, and you know, while oil prices already seem to be extremely high, i'm sure you are hearing people talking about 140 150 per barrel in The future much like in 2018, where we hit 145 dollars per barrel, is this a good time to jump into energy? Well, look the u.s federal energy information administration just forecasted that the global crude oil price is going to decline below 100 by the beginning of next year, 2023. So, based on that, it doesn't seem like a good idea now, in its april short-term kind of energy outlook, they talked about the price of oil averaging 102 dollars by the end of 2022 and 93 dollars by the end of 2023. Now they also said that this price forecast is highly uncertain, citing you know a lot of unprecedented events, geopolitical uncertainty, basically a lot of stuff. They don't know how to deal with ukraine, for example.

So basically they're just telling you hey, we have no idea. So, with your permission, i'm going to try and give you a better answer here with a lot more data and not just well. I don't know now. Look first of all, you got ta understand energy.

By definition, is the momentum play and it's not a long-term investment like you used to see on my channel and these sort of momentum plays, they tend to be very violent and volatile and they might switch up on you faster than my grandpa. If you try to go for his vodka, be careful now when energy and commodities change directions, it happens hard and fast and as an investor, you absolutely cannot ignore that risk. It must be priced in into your investment thesis for it to make sense, so be careful. Now, one way to mitigate investing in energy and commodities is just by diversifying your portfolio with bitcoin and other reliable and established cryptos, and this is exactly where our sponsor for the day ftx us comes in now.

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This is not a script. Trust me i'm telling right now, i'm personally a loyal customer of the product and the platform and have done my due diligence, and i got ta be honest with you. I was really impressed with what they got to offer now. I would have never agreed to do any sort of other sponsorships if i was not gaga about their product simple now, there's a reason why they work with the likes of tom, brady and steph curry, and why everybody's talking about them? You don't hear a lot of bad negativity about them.

Why? Well? Because it's trusted by millions of users is the most complete crypto finance app in the market right now and soon you're gon na invest in crypto and stocks, it's 85 cheaper than any of the other top competitors in the market, and i'm telling you pause this video Go to the link below click on it enter my code, tom nash get a free crypto on every trade above ten dollars and then thank me later now. Let's go back to the video now as far as the actual energy sector analysis goes we're in deep, not gon na lie. Now, according to the us department of energy, the oecd, commercial oil inventories, oycd's organization of the largest 40 countries in the world is a 2.6 billion barrels right now, which is the lowest level since 2014.. Now, in addition, the report states that russia's oil production will decline by about 1.7 million barrels a day by the end of 2023, which means that the united states and opec will have to pick up the slack.

If we don't want to see oil prices go berserk, it just seems that if you look at the next six months, there's a lot of demand for energy, that's about to be released into the wild. Like my grandpa out of a new year's party, now, look obviously russia getting involved in the war in ukraine isn't helping this them getting sanctioned, isn't helping this? These are catalysts for higher energy prices. Now the war in ukraine goes on and on, and it's not really clear when it will come to an end putin's legacy, and maybe his own life depends on him winning the war he must win. While the ukrainian people have shown that they won't back down and they will fight to the last bullet, so as long as this work continues, it will keep pressuring energy prices upwards now.

On the other hand, saudi arabia, which is the leader of the opec countries, have shown no desire to help the us. Why would they? The us have actively pursued a peace deal with their enemies, iran and they're, not showing any support for the saudis battle against the yemenis houthis and actively blaming the saudis for the murder of the journalists in turkey. So saudi arabia basically seems content to sit on 150 per barrel and not help the us. I mean why would they that's their prime real estate? Now you would think that the saudis could just let the prices spike and collect the checks, but there's a certain point in which the prices will get too high and the businesses will simply shut down and it's going to lead to loss of demand so crashing the Oil prices isn't what the saudis want to do here.

So traditionally, it's kind of widely considered that 150 per barrel is the max before you break the system. So opec will be monitoring the prices closely in order to not let the price spiral out of control, but we're not anywhere near that right now. Now what you need to understand is that energy production is a capex intensive industry with a long production cycle, meaning it takes years to develop and exploit oil and energy. Now the problem is that between the pandemic environmental pressures and the venezuela sanctions, russia, sanctions, iran, sections and everything that happened in 2020 capex investments, capital investments in oil have been quite abysmal.

In the past few years, and drillers went under equipment was scrapped and sold. Employees were fired and now it's going to take years to rebuild new equipment and even with the massive capital investment we're going to put into this industry, it's not going to happen tomorrow, meaning there's no supply that can go up right now, it's going to take years! Meanwhile, the world is reopening, i mean even china is looking at june to remove the lockdowns and demand for energy is going through the roof, creating a classic demand spike with historically low supplies, which should lead to increased energy prices in the foreseeable future. So unless some world-changing event brings down demand again, high oil prices are here to stay for at least a few more months now. Having said that, the problem with oil and energy is there's crowd, sentiment around it right now, the same people who were screaming at you that the world is finished in 2020 because of the pandemic are screaming.

Oil can only go up. Remember now that to me signals it's a very precarious time to be in oil markets. It's the shoe shiner in the corner, basically telling you about oil prices that can only go up kind of situation. Now the stocks only go up of 2021.

It seems it's now. Oil and it's kind of scary, however, at least for now, supply for oil is very limited and the demand is an all-time high. The problem is that the only means to fix an overheated market as tight as this energy market is by demand, destruction or gross supply expansion, neither of which seem to be probable scenarios in the near future, as i just explained a second ago. So until demand drops off or supply increases, oil is going to keep going up and remaining high and that's just simple math.

The problem is that the party is going to end at some point and it's going to happen hard and fast, and you don't want to be there when it happens. So just be careful. If you aren't thinking about investing in energy just do it methodically. Do it carefully and assess both risks? Looking for potential entry points that actually make sense to you, as always a huge shout out for our channel members and patreons, you can sign up below 5 bucks per month.

See you next video 30 hertz straight up.