With the ‘threat' of extra global oil supply from Iran, Jonathan Waghorn, co-manager of the Guinness Global Energy fund, argues cheap energy equity prices could be due an upsurge in 2014.
Energy equities this year have been ahead of general natural resources, but behind the broad equity market. As a result, the sector looks cheap on relative and on absolute metrics, based on Brent at around $100/bl. Oil market participants, and energy investors, have been fixated for a while about the return of Iranian oil, and the impact on oil prices. Now that Iran has agreed to curb some of its nuclear activities, exports of Iranian oil are expected to increase – albeit not until the end of the year. Yet the Brent crude oil price has risen to over $112/bl, higher than before the ann...
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