Fund Idea High oil prices are here to stay, with oil possibly | FSMOne SG - Research Highlights

Fund Idea

High oil prices are here to stay, with oil possibly reaching USD 150

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• Russia’s energy exports had initially been spared from sanctions by the US, but this has since changed. On 8 March 2022, President Biden signed an Executive Order to ban the import of Russian oil, liquefied natural gas, and coal to the US.

• While the world remains fixated by how the Russia-Ukraine conflict has pushed up oil prices, we think that oil prices would have rallied even without this event.

• The oil market was tight even before Russia invaded Ukraine. Years of under-investment in the sector, coupled with OPEC+’s reluctance and inability to increase oil supply, means that there are likely no buffers against high oil prices.

• Moreover, with oil being a major beneficiary of a continued economic reopening over the course of 2022, oil prices could reach USD 150 per barrel.

• Investors can consider the Blackrock World Energy Fund A2 USD and JPMorgan Funds - Global Natural Resources A (acc) USD Fund to get exposure to the booming oil and gas industry.

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: Blackrock World Energy Fund A2 USD, JPMorgan Funds - Global Natural Resources A (acc) USD Fund