With only a few trading days left in 2020, analysts are taking stock of the best and worst stocks this very unusual year has brought. The pandemic and the resulting collapse in oil prices hit the already weak energy sector that existed the poorest performer in all sectors, yesr. The development of vaccines and the launch that followed shortly afterwards raised the shares of companies in the oil and gas sector in the fourth quarter. Even so, the energy industry is still the worst performer, with many companies losing billions of US dollars in their market valuations.
Some of the biggest names in the energy industry have been among the poorest energy performers since 2020. And no sector in the oil and gas industry has been exempted from the bloodbath in 2020, from integrated oil and gas to exploration and production, pipeline transport, refining and oil field. Services.
Energy stocks rose in November and most of December, fueled by hopes that vaccines will return to some normalcy next year. However, the energy sector of the S&P 500 index fell 38% this year on December 22, according to Yardeni Research he showed.
This compares with the overall performance of the S&P 500 index, which gained 14.1% this year. The second lowest performing sector, the financial sector, lost only 7.4 percent – making it the largest energy lost by a mile.
Earlier this year, investors fell from energy stocks after oil prices plummeted and it became clear that global fuel demand will not return to pre-pandemic levels for at least another two years.
The rally of vaccine-backed oil and energy stocks showed that at least some investors believed that energy would be a major (if not the biggest) beneficiary of a return to growth, whether it was a return to growth or simply oil demand returns to growth.
Before the first announcement of vaccine discovery from Pfizer and BioNTech on November 9, the oil and gas industry was not only the biggest loss of the market in 2020, but also became the poorest performer on the market – ever. The energy sector lost 52.5 percent between January and October, with the worst losses in any sector since 1928.
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However, since the end of October, the energy sector has surpassed all others, as has the S&P 500 index, up 27.1% from a 12% increase in the broader index.
Despite the fourth-quarter rally, which sees US energy stocks enjoying the best neighborhood of 1989, the energy sector is still the largest inefficient, and some of the biggest names in the industry have performed significantly even the inefficient energy sector.
Ryan Downie din The motley lunatic compiled a list of some of the poorest performers.
The world’s largest oil service provider, Schlumberger, increased by 23% in Q4. However, the oil service provider has lost almost half of its market valuation year so far, its shares have fallen by 47% this year, and its market capitalization has fallen by more than $ 20 billion to just below $ 30 billion as of December 22.
Schlumberger and other suppliers of services and equipment to the oil industry felt that oil prices and oil demand were falling the worst, as upstream companies cut their drilling budgets.
US shale company EOG resources was another big performer this year, losing 42 percent of its value, or nearly $ 20 billion.
Supermajor ExxonMobil It has also fallen 42% so far and lost more than $ 110 billion in market value, to $ 174 billion at the end of December 22 trade. fired of the Dow Jones Industrial Average, where it has been sitting comfortably since 1928.
Giant refining Phillips 66 it also had a difficult year, losing 40% or about $ 20 billion of its value. Shares of pipeline giant Kinder Morgan have also fallen 40 percent so far.
Despite these dramatic declines in market performance, the energy sector could be heading for recovery next year, based on the fourth-quarter rally, as valuable investors are likely to pursue undervalued stocks, analysts say.
“This poor performance, combined with a low valuation of equity, could make energy stocks the best segment of global equities in 2021,” said Peter Garnry, head of equity strategy at Saxo Bank. said at the end of November.
“Growing investors no longer exist in this sector because there is a risk of terminal demand in the future, and valuable investors govern the day,” said Matt Portillo, an analyst at investment bank Tudor, Pickering, Holt & Company. Financial times this month.
By Tsvetana Paraskova for Oilprice.com
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