Oil is in a bull market that is just getting started. For investors, there is tremendous opportunity in small-cap energy stocks which remain significantly undervalued. Read more to find out why TransGlobe Energy (TGA) is our featured stock of the week.Just a little less than a year and a half ago, West Texas Intermediate (WTI) crude oil futures made history by trading in negative territory. At that point in time, it would have been hard to imagine that in less than 2 years that oil would be trading at multi-year highs.
In fact, oil is now trading at its highest levels since 2014. Equally impressive, the record inventory gluts have been completely worked through, and we are at inventory levels that are below historical averages. Demand is already back to pre-pandemic levels, and there is another looming catalyst for demand as travel remains below pre-pandemic levels and could return to previous levels if/when the virus situation continues to improve.
From the supply side, CAPEX remains low despite higher prices and has been low for the last few years. This means that oil is likely in the early stages of a multi year bull market. This week’s featured stock under $10 - TransGlobe Energy (TGA) - is well-positioned to benefit from these trends.