Editor’s Note: The U.S. stock market and the InvestorPlace offices, including Customer Service, will be offline on Wednesday, June 19, for the Juneteenth holiday. Regular hours will resume on Thursday, June 20, at 9 a.m. Eastern time.
Hello, Reader.
A recent Bloomberg news story declares, “The world is flying again.” It goes on to say…
Coming any minute now to a sky near you: a plane packed with people going on vacation, leaving wispy white contrails in its wake and memories of Covid-19 that seem like a bad dream.
According to the International Air Transport Association (IATA), a record 10.5 million flights will crisscross the globe this year – consuming a record volume of jet fuel as they do.
This day has been a long time coming. Jet fuel consumption suffered a far bigger and more enduring hit during the pandemic than any other mainstream petroleum product, and it did not recover nearly as quickly as other facets of the travel and tourism industry.
In fact, jet fuel consumption this year is on track to top the 2019 record of 7.5 million barrels per day (BPD). During the depths of the pandemic, consumption plummeted to less than 2 million BPD. Since then, demand for jet fuel has been making a steady, although very slow, recovery.
Therefore, its return to pre-pandemic levels marks a Champagne-popping moment for the oil industry. The aviation industry’s demand for crude oil (via its demand for jet fuel) has accounted for 100% of the net global crude oil demand growth during the last two years.
As a result, global crude demand is outpacing supply once again. Although this supply deficit is not yet large or persistent, it could add upward pressure to oil prices. Additionally, it provides little room for supply disruptions of any kind. As you can see in our Chart of the Week below, global crude oil inventories have slipped to just 27 days’ worth of supply, which is within a whisker of all-time lows.
The large and (still) growing demand for crude oil shows that the demise of fossil fuels has been greatly exaggerated. Perhaps that’s why most of the individual energy-related companies in my Fry’s Investment Report portfolio have outperformed the S&P 500 index during the last 12 months.
If you are a Fry’s Investment Report member and own any of these companies, you can log in here to read my latest recommended course of action for this group of stocks.
If you are not yet a Fry’s Investment Report member and would like to learn how to become one, click here now.
Now, here’s what we covered here at Smart Money in the last week…
Apple Intelligence, the new AI system from Apple Inc. (AAPL), is bringing a world of change to the company’s products. At the Worldwide Developers Conference last week, the tech giant’s core announcement (pun intended) was its highly anticipated AI system… and investors were ripe with excitement. Apple is now what I like to call an AI distributor… and a major one at that. Click here to continue reading.
When you see a new item show up on Costco shelves… you know it’s made the leap from fleeting fad to everyday necessity. That’s why you should know about a surprising item that’s now flying off Costco shelves… gold bars. That’s because gold prices have rocketed in the past year So, how high can gold prices go? To learn the best way for you to get in on this gilded trend, read more here.
AI is an incredibly powerful – almost scarily powerful – megatrend. The implications of its deployment will supercharge choice companies into previously unachievable milestones… including the coveted trillion-dollar market cap. Yes, you read that right – trillion with a “t.” So, I’ll share one company that I think could harness AI’s power to propel itself into the trillion-dollar club… and whether it’s a good investment. Learn more here.
Looking Forward
As a reminder, InvestorPlace offices will be closed this Wednesday, June 19. So, I’ll be back in touch with your next Smart Money on Thursday, where I’ll discuss an opportunity in the precious metal market that still has some shine in it.
Hint: The demand for this metal reached a platinum record last year.
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