Weakness in energy stocks 'attractive opportunity': Credit Suisse - BNN Bloomberg

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The recent underperformance in the energy sector has led one analyst to make a bullish call on the industry.

"We see this pullback as an attractive opportunity," Manav Gupta, an analyst at Credit Suisse, wrote to clients in a note on Tuesday. Over the last two weeks, the S&P 500 energy index has lagged behind the broader market by 18.5 per cent, following growing calls of a possible global recession ahead.Unless a global economic downturn severely impacts demand, Gupta said the current constraints on global oil supply and elevated oil prices should stand to benefit energy investors.

He said he thinks the International Energy Agency is “overestimating supply growth from certain regions ” and is projecting the oil market will continue to be undersupplied in the second half of 2022."We continue to believe that in a post Russia-Ukraine conflict world, we are short of crude oil, refined products and natural gas," he said.These energy supply constraints have led to a steady rise in oil prices over the past several months despite a more recent modest decline in prices.

 

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