Iran’s oil shock puts the Teflon-market thesis to the test
Markets enter the week facing not simply another geopolitical headline, but the prospect of a structural energy repricing. After US-Israeli strikes killed Iran’s supreme leader and Tehran retaliated across the region, investors are bracing for a sharp adjustment in oil and gas markets when trading resumes. The issue is no longer whether risk premia rise, but how disruptive and persistent they may become. “The implications for energy markets and commodities, especially for crude oil and LNG flows, are asymmetric and could trigger severe market reactions very soon,” said Cyril Widdershoven, a senior advisor at Blue Water Strategies.
Markets confront new uncertainty after U.S. strike on Iran
Geopolitical risk returns as markets weigh Iran escalation, energy disruption and central bank caution following U.S. attacks on nuclear sites.
Oil stocks are a very cheap hedge against inflation
The energy sector serves as a safe haven during periods of geopolitical turmoil and is showing greater investment discipline. However, an increasing oil supply is dampening short-term expectations.
Chart of the week: regime change or oil?
Long-term inflation expectations have risen this year.
Top five energy funds: BGF World, NN Energy stand out
Among the top five actively managed mutual funds in the energy sector that are tracked by Morningstar, the BGF World Energy and NN (L) Energy funds stand out as top performers when considering the year-to-date performance of this type of funds.
Fossil fuels: ‘reports of my death are greatly exaggerated’
Despite a wider uptake of alternative energy, fossil fuels like natural gas, oil and coal are here to stay for the next decades and the MSCI Global Energy Composite index will outperform both renewable energy stocks and the broad equity market over the next year, JP Morgan Asset Management said in its 2022 Annual Energy Paper.
Demand for oil grows at the drop of a hat
Major investors like Warren Buffett and Goldman Sachs are increasing their positions in oil stocks. Buffett recently bought large positions in Chevron and Occidental Petroleum. For Goldman, Exxon is the favourite. The price of oil this year peaked at $123.70 a barrel on 8 March and has since fallen to around $100 a barrel. Historically, these are not low prices, but apparently there is more in the barrel.
Why oil prices will rise further
Expectations are growing that oil prices will rise further. The most recent rise was prompted by suggestions that the West would boycott Russian oil and gas, a boycott that materialised with US and UK decisions on Wednesday.
'No good entry point yet for energy stocks'
Oil stocks have never been so cheap, but there are no signs yet that prices have bottomed out. We’re still waiting for a turn in market sentiment, say head of Automated Intelligence Equity Tjeerd van Cappelle at NN Investment Partners and NN Energy fund manager Anastasia Naymushina (photo).