Highlights

• IEA has warned that a rise in energy demand in the next few months could further raise the oil prices and push most countries into recession.
• Last year, IEA asked investors to make more investments in renewable energy and nuclear power projects if they want the world to reach Net Zero emissions by 2050.

A rise in energy demand in the next few months could further raise the oil prices and push most countries into recession, the International Energy Agency warned on Monday.

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Speaking at Davos on Monday, IEA Executive Director Fatih Birol the rise in energy costs contributed to rampant inflation and Europe still imports a substantial amount of money from Russia even after imposing sanctions on Russian oil and gas. He further added in an interview with Bloomberg that all players in energy markets need to make a positive contribution to ensure that prices don’t spike.

As of 24 May, around 7:13 AM (GMT), Brent crude futures were down by 1.42% to 109.19 a barrel and WTI futures was down by 1.37% to 108.81 a barrel. It comes after increasing concerns over a possible recession and China’s Covid curbs outweighed an expectation of tight global supply.  

Birol warned that China’s oil demand has weakened in recent months due to the spread of Covid-19 and the number of stringent lockdowns, but oil prices could rise further if demand in China picks up in the coming months.

The Organization of the Petroleum Exporting Countries (OPEC+) has been increasing its oil supplies in the market. Earlier this month, the Paris-based agency said that Russia’s oil revenue has increased by 50% despite sanctions from Western countries and estimated that the global energy sector income may jump to US$4 trillion in 2022, which is more than twice its five-year average.

Last year, IEA asked the investors to make more investments in renewable energy and nuclear power projects if they want the world to reach net-zero emissions by mid-century.

Let us look at 3 FTSE-listed energy stocks that may gain with further increase in oil demand.

Related Read: RIO, BP join hands for marine biofuel trial: Should you buy them now?

1. Diversified Energy Company Plc (LON: DEC)

The market cap of the US-based independent oil and gas company stood at £1,069.99 million as of 24 May 2022. The company recently declared a first-quarter interim dividend of 4.25 cents per share.

The share of the FTSE 250-listed Diversified Energy Company Plc was trading at GBX 125.30, down by 0.40%, on 24 May 2022, at 8:30 AM (GMT). It has performed well as its share value has appreciated by 12.36% over the past one year. However, its YTD return stood at 20.04%, as of 24 May 2022.

©2022 Kalkine Media®

2. Vivo Energy Plc (LON: VVO)

The market cap of the UK-based downstream petroleum company stood at £1,811.73 million as of 24 May 2022 and it operates in 23 countries across Africa. The company recently announced that Doug Lafferty has stepped down as Chief Financial Officer (CFO) and the search for a new CFO is on.

The share of the FTSE 250-listed Vivo Energy Plc was trading at GBX 140.00, down by 2.10%, on 24 May 2022, at 8:30 AM (GMT). It has performed well as its share value has appreciated by 32.58% over the past one year. However, its YTD return stood at 6.13% as of 24 May 2022.

Also Read: MNG, IMB, DEC: Stocks you may invest in for retirement amid recession fears

3. Tullow Oil Plc (LON: TLW)

The market cap of the UK-based oil and gas company stood at £780.75 million as of 24 May 2022. The share of the FTSE 250-listed Tullow Oil Plc was trading at GBX 54.10, down by 0.46%, on 24 May 2022, at 8:30 AM (GMT). It has performed well as its share value has appreciated by 3.32% over the past one year. However, its YTD return stood at 16.19% as of 24 May 2022.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.