Stocks to watch if oil prices rise further in the coming months
A surge in energy demand over the next few months could push oil prices up further and push most countries into recession, the International Energy Agency warned on Monday.
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Speaking in Davos on Monday, IEA executive director Fatih Birol said rising energy costs have contributed to runaway inflation and Europe is still importing a substantial amount of money from Russia, even after imposing sanctions on Russian oil and gas. He further added in an interview with Bloomberg that all players in the energy markets must make a positive contribution to ensure prices do not rise.
As of May 24, around 07:13 (GMT), Brent futures were down 1.42% at 109.19 a barrel and WTI futures were down 1.37% at 108.81 the barrel. It comes after growing concerns over a possible recession and China’s Covid restrictions trumped expectations of tight global supplies.
Birol warned that demand for oil from China has weakened in recent months due to the spread of Covid-19 and the number of strict lockdowns, but oil prices could rise further if demand in China picks up in the coming months.
The Organization of the Petroleum Exporting Countries (OPEC+) has increased its oil supplies to the market. Earlier this month, the Paris-based agency said Russia’s oil revenues had risen by 50% despite sanctions from Western countries and estimated that global energy sector revenues could climb to 4 trillion dollars in 2022, more than double their five-year revenue. medium.
Last year, the IEA called on investors to invest more in renewable energy and nuclear power projects if they want the world to reach net zero emissions by mid-century.
Let’s look at 3 FTSE-listed energy stocks that could gain with a further increase in demand for oil.
- Diversified Energy Company Plc (LON: DEC)
The US-based independent oil and gas company’s market capitalization stood at £1,069.99 million as of May 24, 2022. The company recently declared an interim dividend of 4.25 cents per share in the first quarter.
FTSE 250-listed Diversified Energy Company Plc stock traded at 125.30 GBX, down 0.40%, on May 24, 2022 at 8:30 a.m. (GMT). It has performed well as its stock value has appreciated 12.36% over the past year. However, its YTD yield stood at 20.04%, as of May 24, 2022.
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- Vivo Energy Plc (LON: VVO)
The market capitalization of the UK-based downstream oil company stood at £1,811.73 million as of May 24, 2022 and operates in 23 countries across Africa. The company recently announced that Doug Lafferty has stepped down as chief financial officer (CFO) and the search for a new chief financial officer is underway.
Vivo Energy Plc’s share, listed on the FTSE 250, traded at 140.00 GBX, down 2.10%, on May 24, 2022 at 08:30 (GMT). It has performed well as its share value has appreciated 32.58% over the past year. However, its YTD yield stood at 6.13% as of May 24, 2022.
- Tullow Oil Plc (LON: TLW)
The market capitalization of the UK-based oil and gas company stood at £780.75 million as of May 24, 2022. FTSE 250-listed Tullow Oil Plc’s share traded at 54.10 GBX, down 0.46%, on May 24, 2022 at 08:30 (GMT) . It has performed well as its share value has appreciated 3.32% over the past year. However, its YTD yield stood at 16.19% as of May 24, 2022.
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