Latest predictions are calling for a drop in oil prices over the next two years, while natural gas prices are expected to rise. This is a major change from recent years when just the opposite was true.
This will bring about several changes for consumers; in fact, the market is already starting to reflect increases in natural gas stocks and a slight drop in the value of oil stocks.
It is also an indicator that many investors need to start making changes in their investment strategies.
Taking the steps now to improve your portfolio will protect you when these predictions fully come to fruition.
Some of the most popular and highest-performing energy stocks will be impacted by these predictions.
BP plc (ADR) (NYSE:BP) and Exxon Mobil Corporation (NYSE:XOM) are two of the most popular and best-performing oil stocks. So far, the stock prices for both companies are holding steady, with very slight increases.
This should start to turn over the next few months. These companies will ride out a drop in oil prices, but stock values will decrease over the next two years as predicted.
This doesn’t mean that shareholders should toss all their holdings and get completely out of these stocks, but drawing down the amount you have invested in these companies may be a good idea until gas prices go back up.
On the other hand, if you don’t have a healthy section of your portfolio involved in the natural gas arena, you should probably think about moving into this sector.
Chesapeake Energy Corporation (NYSE:CHK) is a major supplier of natural gas; in fact, they are currently ranked as the second largest supplier of this critical fuel in the United States.
As natural gas prices rise, the value of this company’s stock will also rise.
However, there are some issues with this stock, as Chesapeake is slowing down their natural gas production in favor of other fuels.