OIL & GAS

After blazing energy rally, investors check the fuel gauge amid recovery

Investors are gauging how far a rally in beaten-down energy shares could run, as an expected recovery for the coronavirus-hit economy clashes with skepticism about the long-term prospects of fossil fuels.

Energy shares overall soared nearly 27% in November, leading the charge among sectors expected to benefit from the broad economic revival promised by encouraging developments for several vaccines against COVID-19.

The longer term outlook for the sector, however, remains uncertain, as companies throughout the oil and gas supply chain face challenges from the increasing use of “green” energy sources such as wind and solar. Another concern is resistance among fund managers to investing in fossil fuel companies over environmental concerns.

“It’s always hard to be extremely bullish on a sector that is likely in secular decline, and the traditional fossil fuel sector is very likely in secular decline,” said Doug Cohen, a portfolio manager at Fiduciary Trust International.

Coronavirus-related developments will continue to draw investor attention next week, as a U.S. health advisory panel meets Thursday to discuss whether to recommend emergency use authorization of a vaccine developed by Pfizer Inc with German partner BioNTech SE.

Source
ET Energy World
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