Oil and gas demand has outpaced supply resulting in oil and gas prices reaching multi-year highs. While oil prices retreated on concerns over the omicron coronavirus variant, analysts expect the prices to hit $100 per barrel. Therefore, it could be wise to buy the dip in oil & gas stocks such as China Petroleum & Chemical (NYSE:SNP), APA Corp. (APA), SilverBow (SBOW), and VAALCO (EGY).Oil and gas prices reached multi-year highs this year. Moreover, oil prices rose more than 50% this year, with demand outpacing supply as countries came out from lockdowns and travel restrictions imposed last year. In an effort to bring down prices, President Biden announced that the federal government would be releasing 50 million barrels of crude oil from its strategic oil reserves. However, desired effects may not be achieved, and analysts anticipate the strategy could drive prices to $100 per barrel.
According to JPMorgan Chase & Co. (NYSE:JPM) analysts, Brent prices can reach $120 per barrel in 2022 and $150 per barrel in 2023, with the OPEC+ cartel keeping a tight supply. Moreover, the recent drop in oil prices is tied to concerns over the omicron coronavirus variant and is expected to be short-lived.
Therefore, it could be wise to buy the dip in the fundamentally strong oil and gas stocks China Petroleum & Chemical Corporation (SNP), APA Corporation (APA), SilverBow Resources, Inc. (NYSE:SBOW), and VAALCO Energy, Inc. (EGY).