Is Crude Oil Bullish?

Oil is a major input for inflation and GDP.

Oil peaked out at nearly $130 in early 2022 after running hot in late 2020 and early 2021 on high inflation.

Oil pulled back starting in 2022, and has consolidated gains near the $75 level for most of the past 18 months, with a brief run to $90 leading up to the start of the Hamas/Israel conflict last October.


Crude oil prices began rising again in December 2023, culminating in a breakout this April that members of Foundational Profits began buying with the Energy Select Sector SPDR Fund (NYSE: XLE). Nearly 45% of that fund is Exxon (27%) and Chevron (17%).

2 Stock Ideas for May

Markets are changing.

And you need to be changing your positioning as a result. 

Nick Hodge has been managing his own retirement portfolio for years with market-beating success. Thousands of investors follow his monthly moves with Foundational Profits

You can see his recommendations for May in the new issue.

Get access to it here.

There is a broad case to be made for continued bullishness in the oil complex, including macro factors like renewed economic growth and sticky high inflation.

In the global oil market specifically, there are ongoing bullish fundamentals as well, particularly on the supply side. OPEC is continuing production cuts this quarter, and they will likely extend toward 2025. 

At the same time, production growth is expected to be modest in the US this year and peak in the next few.

More broadly, production at BP and Shell has declined sharply over the past few years as their mother countries impose climate-based restrictions. BP, for example, has been planning on lowering its oil and gas production by 42% from 2.6 million barrels of oil equivalent per day in 2019 to 1.5 million barrels by 2030. As such, it has underinvested in oil production. 

Now, amid higher oil prices and share price underperformance relative to its peers, BP says it is going to shoot for two million barrels of daily production in 2030.

Chasing Exxon and Chevron in production terms is going to require M&A as well as capital expenditures.

After running to $87 last month, oil is consolidating those recent gains near $78, giving us a chance to add to our exposure to the sector with names that will benefit from that spending. 

Do that by adding the….

Editor’s Note: What you just read was a section of the May issue of Foundational Profits. To get that oil recommendation, as well as the rest of the portfolio, which includes cannabis, copper, uranium, dividend stocks, and more… you can get the full issue here. It outlines exactly how much I own of each position in my retirement accounts.

Call it like you see it,

Nick Hodge

Nick Hodge
Publisher, Daily Profit Cycle