The Oil-Supercycle is far from over

Investing into drilling activity isn't attractive anymore // A deep dive into the oil producer sector.

Hey there, Lukas here with a special report about the energy sector.

While oil prices have continued to rise in recent months, the flow of money into new oil and gas projects has stalled. Investors are increasingly avoiding industries that produce fossil fuels and high CO2 emissions. This correlation between energy prices and capital spending is likely to sustain the cost of a barrel of oil but could also help to significantly accelerate the transition to renewables.

We continue to see a boom in crude oil prices. Since the start of the year, U.S. crude oil contracts have risen by more than 40 percent, while Brent North Sea crude, which is more common in Europe, has seen a price increase of 35 percent. These performances are even more remarkable because the price of crude oil is currently undergoing a correction and is 10 percent below its February highs.

The major oil companies such as Exxon Mobil, Royal Dutch Shell and Total Energies, to name just a few examples, and their shareholders are also pleased that crude oil prices are continuing to rise. This is because rising crude oil prices mean rising margins, which in turn means that the share performance of companies in the sector correlates strongly with energy prices on the futures markets.