Over the past 10 years, the energy sector has underperformed the broader Australian share market by over 50% and is priced at relative levels similar to January 2016 when oil prices fell below US$30 per barrel.
Now Australian dollar oil prices are back above A$90 per barrel, but Australian oil and gas stock prices are nowhere near the levels reached the last time oil was trading at those levels.
We believe the energy sector is the most contrarian sector in the Australian market today.
In this short video interview with Livewire, Analyst Sudhir Kissun explains that despite concerns over the impact on oil demand from electric vehicles and stricter climate change regulations, we believe that oil prices are just too low today. He also discusses one of our portfolio’s largest exposures to energy, Oil Search, and our rationale for investing in the company.
Past performance is not a reliable indicator of future performance.
There are risks involved with investing and the value of your investments, including in the Allan Gray Funds,
may fall as well as rise. This article represents Allan Gray's view at a point in time and may provide reasoning
or rationale on why we bought or sold a particular security for the Allan Gray Funds or our clients.
We may take the opposite view/position from that stated, as our view may change.
This article constitutes general advice or information only and not personal financial product, tax, legal,
or investment advice.
It does not take into account the specific investment objectives,
financial situation or individual needs of any particular person and may not be appropriate for you.
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please read the relevant disclosure document available on this website.
We have tried to ensure that the information in this presentation is accurate in all material respects,
but cannot guarantee that it is.