From Oil Product Tightness To Natural Gas Storage, This Is How We Think You Should Allocate In The Energy Sector This Year
Similar to the article we wrote yesterday laying out how we are thinking about this year, this article is to help guide how you should think about allocation within the energy sector. What particular names should you be allocating to and what subsectors to avoid? We hope to have everything covered in this piece.
First and foremost, here's the current landscape we are seeing in the market today:
Product storage tightness thanks to the recent prolonged US refinery outage and China reopening will have important implications on which subsector outperforms.
EU natural gas storage and US gas storage on a relative basis are bloated.
Servicing cost inflation this year will increase another 30-40% and why oilfield servicing names are likely to further outperform this year.
With all that said, let's get to it.