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Focus: Energy stocks
MARKET OUTLOOK
Oil has entered into a multi-year bull market. Already, countries including China, India and Brazil are back to pre-COVID demand levels while other regions more affected like the U.S. and Europe are imminently rolling out numerous vaccines. We can now look through to a post-COVID world in 2021, but what does that look like for energy investors?
Prior to COVID, certain bullish trends were already in place and have now been accelerated: loss of U.S. shale production growth due to a need to prioritize return of capital over drillbit spending, a global offshore plateau/decline due to over five years of insufficient investment in new projects and limited OPEC spare capacity (adjusting for curtailed production that will be brought online in 2021 as demand continues to normalize). The global oil inventory surplus has already fallen by about 33 per cent from its high and we