COMMENTARY / World

Energy’s year of recovery more like a remission

For energy stocks, COVID-19 was like a sharp kick taking down a rotten door marked 'exit'

To call the past year a recovery for the oil sector, implying a return to what existed before, would be incorrect. Instead, it's best to look at it as energy being offered the chance to adopt a healthier lifestyle. | REUTERS

By Liam Denning
Bloomberg

Nov 10, 2021

It’s been one year since the bombshell announcement of positive test results for Pfizer Inc.’s COVID-19 vaccine jolted stocks higher. Since that day, no sector has soared faster than energy.

This was something of a bungee-cord snapback. COVID-19’s lockdowns and general economic mayhem had ravaged oil demand, to the point that Nymex futures actually closed below zero for the first time ever. Until news of the vaccine broke, energy had been the worst performing sector in 2020, falling by more than half.

Since then, oil prices have rallied surprisingly hard, with Brent crude back above $80 a barrel for the first time in three years. Whereas a year ago we were drowning in the stuff, the White House may soon announce a release of oil from the Strategic Petroleum Reserve to cool things off.