Investment opportunity sharing:Energy Industry
As free cash flow remains strong going forward, we expect the energy sector to see strong dividend growth, large-scale share repurchases, and declining net debt. In addition, the market's high sentiment towards the energy industry has calmed down and valuations have adjusted significantly.
I believe that the attractiveness of the industry has once again become reasonable, especially in the face of uncertain geopolitical conditions, which may bring potential opportunities such as income and prevention of inflation.
The above judgment is based on the following points：
1.Demand for oil is very strong.
Global oil demand reached a record high of 103 million barrels per day in June. In addition, the significant production cuts by OPEC, especially Saudi Arabia, are also an important reason for the rise in crude oil prices. In April, Saudi Arabia exported 7.4 million barrels per day of crude oil, but by August, this number had dropped to 5.4 million barrels per day, making such large production cuts unusual in a very short period of time. This drop may not seem large compared to a market with daily demand of 100 million barrels, but it is enough to create a supply gap in the market, causing inventories to fall and prices to rise.
2.Gas prices in Europe are likely to rise again.
Natural gas prices have fallen significantly this year and may fall further. But once supply tightness occurs again, prices could rebound sharply, pushing price expectations higher.
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