Bubbling Oil

03.12.21

Chart of the Week – Bubbling Oil

Brent crude oil is up 257% since its April 2020 bottom. Are there still investment opportunities in the energy patch?

Our global GDP growth estimate of 6.5% for 2021 is well above the consensus estimate of 5.4%. A more rapid economic recovery would be a tailwind for commodity prices. Energy stocks serve as a hedge against inflation rising above expectations and align with our belief that the dollar will weaken as we move further through the cycle. Currently, we believe energy stocks are pricing in a $60 Brent Crude price.

Bubbling Crude

Source: Bloomberg, Ivy Investments. Dates shown are January 2007 through February 2021. This chart is being provided as a general source of information for education purposes only, and is not intended as a recommendation to purchase, sell or hold any specific security or to engage in any investment strategy.