In the recent past, investors have talked about their bullish views on asset classes like gold, silver and cryptocurrency.
However, it seems that "Black Gold" still has a dominantly bearish view. I would take a contrarian approach and I am bullish on Oil (Black Gold).
Let's discuss one big reason to be bullish on oil.
The United States, which has a population of 330 million, has an annual per capita consumption of 934.3 gallons of oil.
China, which has a population of 1.3 billion, has an annual per capital consumption of 138.7 gallons of oil.
India, which has a population of 1.2 billion, has an annual per capita consumption of 51.4 gallons of oil.
Forget about China and India reaching per capita consumption of 934.3 gallons of oil. Even if a population 2.5 billion (China and India), reach a per capita consumption of 300 gallons of oil in the next decade, the demand for oil will be significant.
Therefore, with sustained growth in demand likely, I am bullish on oil. Another factor that makes me bullish on black gold is geo-political tensions. The conflicts in the Middle-East are far from over. Any escalation in tensions would make oil price go ballistic.
It's also worth noting that the dollar is likely to weaken in the coming decade. A weak dollar will be positive for oil and commodities.
In terms of investment and exposure to oil, investors can look at fundamentally strong oil exploration and production companies. I had discussed one company in Leo Finance. Investors can find the article on Chevron Corporation here.
In the near-term, oil is likely to remain depressed as the coronavirus pandemic continues to impact GDP growth. I believe that it's a good time to gradually accumulate quality companies in the oil and gas sector.