Stressed about rising gas prices? There’s a major upside in stocks if you know where to look
NY Post
Stocks have kickstarted the good-to-great year I forecast in December – the recent volatility and fears of war escalation in the Middle East notwithstanding. More pleasant surprises await.
One biggie: Energy stocks, whose recent outperformance should run strong late into 2024. The sector’s rally isn’t some OPEC+ cut-induced headfake or a temporary, war-driven spike. It’s the real thing. Let me show you why.
After energy’s strong showing in 2022 – riding skyrocketing oil prices as Putin invaded Ukraine – most seers imagined 1970s-style supply shortages, stoked by Russian aggression, OPEC+ supply constraints and China reaccelerating post-COVID. That, supposedly, would fire up oil prices anew – and power energy stocks.
Instead, 2023 humiliated energy bulls. The sector gained just 2.5% globally while world stocks soared 23.8%. S&P 500 Energy stocks fell -1.3% while the S&P delivered eye-popping 26.3% gains.
Why? Oil prices had plunged from 2022’s nose-bleeding high. Global production obliterated shortage fears and looked set to keep rising in Norway, Guyana and North America. Biden’s temporary ban on new federal land leases didn’t bite. As the world’s biggest producer, US output topped record highs.
Hence, oil prices ranged around $70 to $95 – stymieing energy firms, whose profits heavily parallel crude prices.
