In our opinion, oil and gas prices will remain high and likely go back up again due to the fast increasing shortage in supply and an expected spike in demand over the coming winter months, from North America through Europe and to large economies in Asia such as China, South Korea, and Japan. And with the continuously rather ignorant energy policies coming from the current U.S. administration and the European Union, we believe the energy sector will remain one of the most profitable investments over the next 6 months, and historically beyond.
Even though the world has been talking about "alternative energy sources" for decades, the fact of the matter is that we are still generations away from an energy grid "fueled" by alternative energy that would allow to meet today's demand of the global economy. Hence, while we share a rather bearish sentiment for the remainder of the year as far as the overall stock market is concerned, we remain bullish on oil and gas stocks as well as related services.
Besides our already standing buy recommendations for BP, Shell, Equinor, and FLEX LNG, we have added the following two companies to our recommendation list:
- Schlumberger (SLB traded in U.S. dollar and SLB.P traded in euro)
- Petrobras (PBR traded in U.S. dollar with a forward dividend yield of 48.35%)
Please let us know if you have any questions or call us for a personalized advisory recommendation in-line with your individual investment- and risk-profile.
Oliver E. Hohermuth, Principal and Chief Investment Officer