Is It Time To Buy Energy Stocks?


Contrary to the belief that renewable energy will supply all the energy needed, we still need fossil fuel in the majority of the cases.

WTI crude is currently trading at 107.5 and Brent crude is trading at 113. End of global lockdown and Russia Ukraine have created a high supply and demand interruption of fuel, which can persist up to the end of this year.

Over the past year, energy stocks have gained 72% on average while the next closest sector, utilities, rose less than 15%. Energy is again on top with a 58% gain as utilities again ranked second with a less than 5% increase in value.

North American natural gas is finally starting to get into global markets and entering into a global demand force. Canada is working on its own LNG terminals, as natural gas has been recognized as the fuel of choice in our journey toward net-zero.

The U.S. Energy Information Association forecasts global “conventional” light-duty vehicles will nearly double from 1.31 billion in 2020 to 2.21 billion at their peak in 2038.


The average analyst forecast for the fule price is also bullish throughout 2022. Various forecasting agencies expect additional supplies to come to the market later this year (and well into the next), with the U.S. leading growth outside OPEC. According to the international monetary fund, global growth is expected to moderate from 5.9% in 2021 to 4.4% in 2022 and 3.8% in 2023.

The question is whether prices will continue to relentlessly march upward.

Considering all of these factors we expect that the energy stock prices have still scope for increase for the rest of the year in 2022 but they should cool down or decline moderately starting from 2023.



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