Ker-ching

Image source: Frank F. Haub and Martial Red on Shutterstock

What's going on?

Saudi Aramcos stock hit an all-time high on Monday, as the worlds biggest oil company gets back to its winning ways.

What does this mean?

Aramco broke records when it listed its shares on the stock market in late 2019, only for the pandemic to promptly send demand for oil and the companys share price plummeting. But good things come to those who wait: the oil price has risen more than 80% since the start of last year, and Aramcos share price has climbed with it. So when the company said on Monday that its expecting demand for the slippery stuff to hang around, its stock reached a whole new all-time high. Thats something the Saudi government which owns the majority of Aramcos shares wants to capitalize on: Bloomberg reports that its planning to sell some of its shares in hopes of raising even more money than it did from Aramcos gargantuan initial public offering.

Why should I care?

The bigger picture: Here comes $100 oil.
The problem here is that the oil supply cant keep up with demand. Energy producers were, after all, cutting back on oil projects even before the pandemic, as governments and investors pushed for lower emissions. And when the pandemic arrived, those companies scaled back production even more. That might be why commodities trader Vitol said on Monday its expecting oil which currently costs $92 a barrel to sit above $100 for a lot of this year.

For you personally: Feel positive about energy.
It might be a good time to be an oil investor: Bernstein Research reckons the seven energy supermajors including BP, Shell, ExxonMobil, and Chevron will deliver $38 billion to shareholders this year through share buybacks. Thats almost double 2014s $21 billion the last time oil traded above $100 a barrel and could make now a lucrative time to buy in.

Originally posted as part of the Finimize daily email.

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