After plunging to multi-decade lows in mid-2020, global energy prices have soared in recent months. Multiple factors on both the demand and supply side have combined to drive up the price of oil, and even more dramatically gas and thermal coal prices.
Last week, we suggested that a good deal of the recent surge in global inflation could be attributed to “transitory” factors linked to the global pandemic.
The energy price surge also arguably contains some temporary or “one-off” influences. However, we believe the energy markets do stand apart by containing a larger component of what is likely to be “structural” upward pressure on prices. We examine the key short-term and longer term drivers of the energy price revival. In this report we cover:
- Global reopening fuels energy price rebound
- Caught short - bad luck or bad management
- Lack of investment in oil and gas laid the foundation for higher prices
- Are energy prices a threat to inflation and growth outlook?
- Markets look too complacent on energy outlook
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Written by
David Cassidy, Head of Investment Strategy
David is one of Australia’s leading investment strategists.