Low reserves

The oil price has made a comeback and is up 24% since its 2023 lows during Mid-March. This should not come as a surprise as world economies prove resilient with sustained demand despite the rate hikes by central banks. Production cuts by the biggest suppliers like Saudi Arabia limit supply. There is currently no buffer for the US to absorb the shock of higher oil prices by temporarily increasing supply. The US strategic petroleum reserves are indeed depleted and currently last for only 16 days. We own energy stocks in our client portfolios: TotalEnergy for example trades at 6.2 times 12 months forward earnings and has a dividend yield of 5.4%.