After plunging to multi-decade lows in mid-2020, global energy prices have soared in recent months. Multiple factors on both the demand and supply side have combined to drive up the price of oil, and even more dramatically gas and thermal coal prices.
Last week, we suggested that a good deal of the recent surge in global inflation could be attributed to “transitory” factors linked to the global pandemic.
The energy price surge also arguably contains some temporary or “one-off” influences. However, we believe the energy markets do stand apart by containing a larger component of what is likely to be “structural” upward pressure on prices. We examine the key short-term and longer term drivers of the energy price revival. In this report we cover:
- Global reopening fuels energy price rebound
- Caught short - bad luck or bad management
- Lack of investment in oil and gas laid the foundation for higher prices
- Are energy prices a threat to inflation and growth outlook?
- Markets look too complacent on energy outlook
About Wilsons: Wilsons is a financial advisory firm focused on delivering strategic and investment advice for people with ambition – whether they be a private investor, corporate, fund manager or global institution. Its client-first, whole of firm approach allows Wilsons to partner with clients for the long-term and provide the wide range of financial and advisory services they may require throughout their financial future. Wilsons is staff-owned and has offices across Australia.
Disclaimer: This communication has been prepared by Wilsons Advisory and Stockbroking Limited (ACN 010 529 665; AFSL 238375) and/or Wilsons Corporate Finance Limited (ACN 057 547 323; AFSL 238383) (collectively “Wilsons”). It is being supplied to you solely for your information and no action should be taken on the basis of or in reliance on this communication. To the extent that any information prepared by Wilsons contains a financial product advice, it is general advice only and has been prepared by Wilsons without reference to your objectives, financial situation or needs. You should consider the appropriateness of the advice in light of your own objectives, financial situation and needs before following or relying on the advice. You should also obtain a copy of, and consider, any relevant disclosure document before making any decision to acquire or dispose of a financial product. Wilsons’ Financial Services Guide is available at wilsonsadvisory.com.au/disclosures.
All investments carry risk. Different investment strategies can carry different levels of risk, depending on the assets that make up that strategy. The value of investments and the level of returns will vary. Future returns may differ from past returns and past performance is not a reliable guide to future performance. On that basis, any advice should not be relied on to make any investment decisions without first consulting with your financial adviser. If you do not currently have an adviser, please contact us and we would be happy to connect you with a Wilsons representative.
To the extent that any specific documents or products are referred to, please also ensure that you obtain the relevant disclosure documents such as Product Disclosure Statement(s), Prospectus(es) and Investment Program(s) before considering any related investments.
Wilsons and their associates may have received and may continue to receive fees from any company or companies referred to in this communication (the “Companies”) in relation to corporate advisory, underwriting or other professional investment services. Please see relevant Wilsons’ disclosures at www.wilsonsadvisory.com.au/disclosures.
Written by
David Cassidy, Head of Investment Strategy
David is one of Australia’s leading investment strategists.