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After a turbulent week in politics, it’s easy to overlook some of the positives that the New Year has already ushered in. Energy investors nervously eyeing a space dominated by pronouncements of peak oil will no doubt have been cheered by Saudi Arabia’s surprise production cut commitment, for instance. Analysts had generally assumed that OPEC+ would be unwilling to walk back oil manufacturing in 2021. Oil prices climbed 5% on the news. The year that oil stocks rebound? Jim Cramer’s “oil is tobacco” pronouncement is pretty close to the mark . However, the biggest oil stocks such as Suncor Energy (TSX:SU) (NYSE:SU) are unlikely to decline much further in 2021. This is due to several factors. First, oil still constitutes a considerable proportion of the world’s energy mix. Second, the biggest oil manufacturers are in a prime position to capitalize on renewables, and are, in fact, already repositioning for sustainable alternatives. Given the dire circumstances that led to last year’s oil crash – an unprecedented economic quagmire that saw oil briefly trading negative – 2021 can only be an improvement. At least, that’s the mainstream expectation. This is because the consensus view sees an end to the pandemic and […]
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