Supply matters in oil
Jun 24, 2022
Oil prices have fallen back from their highs reached mid-June with the US crude WTI for example down 10% back below 110 USD a barrel. Investors are fearing a recession leading to demand destruction. While weakness in commodities could indeed provide some economic reprieve, we suspect oil prices will remain high for the simple fact that the supply side remains stretched after years of underinvestment by energy companies and the geopolitical situation. We remain invested in the sector with TotalEnergy the biggest position in our European value portfolio.