Market Overview

The Future is Bullish for Oil and Natural Gas Stocks

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According to the most recent data from both governments,the United States and China are each importing and exporting more. That means the world's two biggest economies are both buying more and selling more goods and services with other nations.

That is very bullish for oil and natural gas stocks, ranging from prominent blue chips such as Royal Dutch Shell (NYSE: RDS-A) and BP (NYSE: BP) to promising small caps such as Octagon 88 (OTC: OCTX) and Americas Petrogas (OTC: APEOF).

As the largest economies in the world, the United States and China are also the biggest consumers of energy. Based on reports from the U.S. Energy Information Agency and the International Energy Agency, the global demand for energy will increase greatly in the decades ahead.

The country with its energy needs rising the most will be India, however, not the United States or China. As the second most populous nation in the world, behind only China, the demand from India will result in even more energy being consumed.

This need will have to be met by fossil fuels.

Alternative energy does not, at present, have the capacity to meet the needs of the market.  Of the fossil fuels, coal is falling in appeal as oil and natural gas are rising. Coal is simply too dirty. Even China, the world's largest user, has a goal to reduce the amount of coal it uses to protect the environment.

With an increasing demand for oil and natural gas likely, due to the increasing economic activities of not only the world's two largest economies but the countries with the most people, stocks in the sector have a promising future.

Related: 3 Reasons Every Family Office Should Own Oil and Natural Gas Stocks

It has already been a good year for many in the oil and natural gas industry. Even more important, there is something for all investing objectives -- no matter if it is income, growth, or value.

While the average dividend yield for a member of the Standard & Poor's 500 Index is around 1.9 percent, for Royal Dutch Shell it is 4.83 percent. BP tops that with a dividend yield of 4.90 percent.

Growth investors should like the increasing production and rising revenues of Americas Petrogas, a small cap operating from Calgary, the energy capital of Canada. For value objectives, there is Octagon 88, a Swiss firm with holdings in Canada with multi-billion barrel potential.

A previous article here on Benzinga made the case for always buying oil stocks, no matter the price of crude. With the United States and China both importing and exporting more, each's economy will need more energy.

Companies in the energy sector such as Americas Petrogas, BP, Octagon 88, and Royal Dutch Shell should benefit from the rising demand, as will the shareholders for all.

Posted-In: Long Ideas News Dividends Dividends Emerging Markets Small Cap Analysis Commodities Small Cap

 

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