BRK 7.69% 1.2¢ brookside energy limited

A recession, if one does eventuate, will be a shallow recession...

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    A recession, if one does eventuate, will be a shallow recession (compared to the GFC and COVID recession). It will most likely lead to a small drop in the oil price, albeit for a very short duration.

    With majority of Russian oil under boycott, OPEC has the oil market by its throat. OPEC members are already struggling to meet their current production quotas and will readily cut output drastically in the event of a recession. This combined with the capital discipline being shown by US shale drillers, will lead to a rapid recovery in the oil price once economic growth starts to pick up.

    In my opinion, oil is a very safe place to be for the foreseeable future, recession or not. The lack of investment in fossil fuels has given OPEC considerable clout and they are more than willing to defend higher oil prices by throttling supply. Even Iranian oil coming online will not have too much of an impact as OPEC has indicated that they will cut output to offset any additional Iranian production.

 
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