Energy Stocks And Market Optimism
The world never believed that crude oil priced below US$30/bbl was a longer term feature. How about US$60/bbl instead? Share prices for Woodside Petroleum, Oil Search, Santos and the likes therefore never priced in absolutely Armageddon scenarios, as opposed to mining companies. In recent weeks oil prices have surged on the back of renewed OPEC optimism and, of course, this has pushed up share prices. This implies some share prices already are reflecting oil prices that might not be on the horizon any time soon. This apart from the fact that further strength in crude oil means the sector is effectively digging its own grave, again, because supply will respond, if nowhere else then most certainly in US shale. Elsewhere a glut in LNG is building. Oil stocks a must have in investment portfolios? It might be a case of be careful what you wish for. My Weekly Insights: (VIEW LINK)
2 topics