Investors should be thinking about energy equity exposure because:
Energy equities have materially underperformed global equity markets over the last three years as a result of low oil prices and low energy company profitability.
OPEC’s commitment to rebalancing the oil market, combined with strong global oil demand growth, have driven oil prices up. Venezuelan supply issues, the renewal of Iranian sanctions and other Middle East tensions are forcing prices higher. US shale oil supply growing well again but suffering infrastructure constraints.
Energy stocks have not moved much yet but we believe that they will rise – in tandem with long dated WTI oil prices rising to $60 or $70/bl.