With speculative interest in the oil and gas stocks running high and with many oil and gas companies due to release second quarter earnings, many traders and investors are wondering what the coming weeks and months will hold for the energy group. Another consideration is the coming 4-year cycle, due to bottom around September 1, and the possible impact it could have on prices. In this article we’ll examine some important factors as they relate to oil and gas stock prices, including the fuel prices themselves, and hopefully gain some insight on what the future may hold for this group.

Let’s start with a look at the most important of the factors influencing the oil and gas stocks right now, namely the upcoming 4-year/8-year cycle bottom. The 4-year cycle is dominant in most major stock market sectors and it has shown its appearance in the oil stock sector in the past. The previous 4-year cycle and 8-year cycle bottoms have exerted some downward pressure against the oil stocks even in years when the group was in a broad upward trend. The previous 8-year cycle bottom of 1998 saw the Amex Oil Index (XOI) fall from its May high of around 500 to the cycle bottom low of 390 in September.