April 13, 2022
We keep our value sector bias when adding equity exposure with Energy outperformance in early innings. OPEC+ has been under-producing for the past 3 quarters with seemingly structural production outages due to underinvestment. In February, OPEC+ production undershot quotas by 900,000bbls/day. In March, OPEC+ missed production quotas by 1.4Mbbs/day. Lower Russian production only adds to an already tight market, recent SPR releases only support a higher LT risk premium and LNG looks like the white knight to solve Europe’s energy deficits.