Energy companies spent the first quarter of 2021 recharging from a draining year.
Analysts polled by FactSet expect the energy sector to make overall stock gains of up to 45% this year, based on current median target prices. That would make the sector the biggest gainer of the year, far outpacing 20% gains expected in the technology sector.
The energy sector is already the biggest gainer in the S&P 500 so far this year, rising nearly 30%, while the broader index is only up about 5%. The gains mark a sharp turnaround from last year, when the sector shed 37% of its value as people stopped traveling and commuting to work. Their profits disappeared, with many swinging to a loss.
“Investors are coming around to the fact that the recovery is going to be pretty robust,” said
That's helped lift oil prices 20% in 2021, a sharp turnaround from last year's 20% drop. Oil prices are now back to pre-pandemic levels.
Oil producers are expected to continue benefiting from the tighter global supply of oil at a time of increasing demand. Most
Global oil consumption has just about returned to its pre-pandemic levels and is expected to steadily rise through the rest of 2021 and 2022, according to the
“They (OPEC) can easily open the valve and they will at some point,” said
A continued slump in air travel is still holding back a bigger increase in oil demand and
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