We explain why big oil will have big profits in 2023. Oil profits may decline slightly from their record highs of 2022 but will still massive. This includes the 2023 oil price forecasts and explains the 2023 oil and gas sector profit expectations.
One of the most forgotten features of the oil and gas sector is refining and crack spread which is the difference between the raw crude oil input and the gasoline or diesel output from a refinery. Because no one wants to invest billions to build new refinery capacity that will take decades to turn a profit, existing refineries are making billions of dollars in profits today. This is one of the unanticipated problems caused by the transition to green energy sources.
This video explains why the oil and gas sector will boom in 2023 and what banks like JP Morgan, Goldman Sachs, and Citi are projecting for average Brent and WTI prices.
Peter Tindall · January 12, 2023 at 6:07 pm
Actually, high oil price = low crack spread and vice versa. That’s why if you are a defensive investor you buy integrated oils because if they are losing on the front end they’re winning on the back. Pure play producers and refiners win big at opposite ends of the oil price cycle and lose at the other. If you want real security go with pipeliners like Enbridge because you have to be able to move the product and pipelines are the best option. Enbridge is currently yielding in excess of 6 percent on dividends and they have never cut their dividend in 30 years. Anyone who thinks world oil demand is going to decrease in the next 10 years is a fool.