The oil industry has always been a hot investing topic – despite its volatility. Now, more than ever, investors are increasingly looking to secure positions in companies capitalizing on higher oil prices. As a domestic oil producer, Allied Energy Corp. (OTC: AGYP) is known for its lucrative lease sites located in some of the most hydrocarbon rich regions of the country. Given inflation, the lower energy supply, and high energy demand, AGYP is in a good position to achieve growth in this bullish oil market.
AGYP Stock News
2022 is already looking bullish for the oil market as crude oil price projections soar up to $100 per barrel. These price spikes come as no surprise as OPEC struggles to ramp up production and meet increased demand. Despite the larger OPEC+ group promising to increase output up to 400,000 bpd, this target was not achieved these past months. Despite the smaller OPEC group managing to increase output by 70,000 bpd last December, demand continues to rise at a much faster rate.
Additionally, increasingly tight supplies in the US are exacerbated by cold weather disruptions. On this note, Michael Tran – a commodities strategist at RBC Capital Markets – commented on this bullish market for producers saying: “With improving demand, tightening inventories, and questions of OPEC’s ability to ramp further, the directional arrows of progress point to further optimism.”
Another catalyst for higher oil prices is a weaker US. dollar – which positions oil as a less expensive commodity for exporting countries holding other currencies. The dollar weakened partly because investors are growing cautious of December’s inflation data as well as the anticipated increase in interest rates by the federal reserve.
With this in mind, OPEC+ has planned to increase oil production up to another 400,000 bpd as of next month. However as OPEC+ continues to increase production levels each passing month, its excess capacity diminishes along with its ability to respond to increased demand. This is where domestic producers like AGYP can benefit greatly.
To capitalize on this, AGYP is ramping up production across its three main sites – Annie Gilmer, Green Lease and Prometheus Lease Site. Shareholders are bullish the company could witness solid growth as it continues to explore its untapped reserves in 2022. According to an engineering and economic evaluation of the sites’ reserves, the Green Lease site holds $2,944,900 of proved oil and a total of $18,536,600 for both probable and possible oil. Meanwhile, the Annie Gilmer site holds $6,704,900 in proved oil and gas reserves with $5,489,900 in probable and possible reserves.
As a result of its dedication to shareholders and targeted approach to production, AGYP now has a proven record of success in the industry and intends to foster rapid growth by continuously identifying and reworking oil fields. As the company continues to acquire and rework even more existing oil and gas reserves throughout the US, these estimates highlight AGYP’s upside potential in 2022 with a bullish oil market. In fact, approximately 20% of America’s oil production and 10% of its natural gas production comes from marginal wells. With this in mind, the company stands to benefit immensely from the increasing oil prices as it explores lucrative lease sites across the country.
Media Sentiment
Commodity Analyst – Giovanni Staunovo – highlights the evident decrease in US oil inventories – which shows a massive fall in supply.
Technical Analysis
AGYP is currently trading at $.27. The stock shows a primary support at .28 and a secondary support at .2599. It has a resistance at .28 and .2868. The RSI is at 50 and the MACD is bullish to the upside. Despite this, accumulation has remained steady.
Given that AGYP stock usually trades at a higher price point, traders could capitalize on this bottom price. Accumulation remaining steady despite the dip is another bullish sign that demonstrates shareholders’ conviction in AGYP’s competitive business model.
AGYP Stock Forecast
In light of these macroeconomic trends, 2022 is already looking like a bullish market for oil. In fact, oil prices are climbing as supply drops and demand continues to recover despite Omicron fears. It looks like the market is off to a bullish start for 2022 and as AGYP continues to consistently update its shareholders on its progress at its three sites – Green Lease, Prometheus Lease, and Gilmer Lease – AGYP could see an increase in its share value as it continues production.
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