OPEC’s decision to gradually raise production levels is thought to prevent upward price movement for oil. But the International Energy Agency reported that an oil rebound is coming following a three month slump in global demand following Delta variant concerns. This rebound would also be supported by a decline in U.S. crude oil stockpiles which recently hit their lowest levels since September 2019 due to the impacts of hurricane Ida on offshore drilling production. Government data showing this unexpectedly large drawdown in U.S. crude inventories drove oil prices up $2/bbl.
However, this hasn’t translated to consumers as oil marketing companies have been forced to keep petrol and diesel prices consistent for eleven consecutive days. Due to oil’s recent volatility, oil marketing companies have been unable to follow their usual formula for setting and revising petrol and diesel prices. Therefore revisions to prices are made with longer gaps in between, preventing companies from increasing fuel prices when there is a difference between the “globally arrived” and pump price of fuel. This highlights the affects of pandemic concerns on oil prices should not be overlooked.
With this in mind and the increased demand for oil, more eyes are turning to this sector for investment. Allied Energy Corp (OTC: AGYP) is one company with a creative approach to US energy independence. With its shares moving from a sub-penny to $.335 in just one year, AGYP has become an oil exploration company worth watching.
The journey from AGYP’s acquisition of the Annie Gilmer and Green Lease sites to its current position has been a long but worthwhile one for shareholders. The company secured a 100% working interest and 80% net revenue interest ownership stake in the two wells on the Green Lease Site in March. The company’s work on the site was delayed multiple times but AGYP has proven successful in its efforts based on a series of videos released on September 8th.
With pumpjacks now in operation at the Green Lease site, AGYP has the potential for more well acquisitions as it builds on its model of exploiting America’s estimated 420,000 marginal, shut-in oil wells. Targeting wells with the potential to produce 10-50 barrels per day, AGYP chose both these sites with this in mind and recently commissioned a petroleum engineer to evaluate the sites’ potential.
According to the engineer’s findings, the Green Lease site holds $2,944,900 of proved oil and $18,536,600 of probable and possible oil while the Annie Gilmer site holds $6,704,900 in proved oil and gas reserves with $5,489,900 in probable and possible reserves.
Currently trading at $.40, AGYP stock experienced a 25.6% increase today likely due to production news. This puts the stock’s resistance point at .4385 and its closest support at .3703. AGYP stock has a secondary support at .3516. Accumulation is still spiking with the runup but the RSI is moving down from 63. Earlier today the MACD had a bullish crossover and the indicator remains on the upside. At the moment there is no sign of a second crossover.
Should you Buy?
Considering the moment oil is having and AGYP’s tremendous performance today, this stock is quickly becoming one to watch. Beginning production has given AGYP’s stock a notable boost and as the company continues to develop both sites’ reserves, investors could see greater payoffs down the road. At this rate, AGYP stock may return to August’s value of $.45 as oil interest drives investments.
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