BLOOMBERG.COM
Not even an extended OPEC deal may suffice to end the woes of this year’s worst-performing equities in the world. Oil stocks have tumbled 6.4 percent this year, the only group to decline in the MSCI All-Country World Index. While the Organization of Petroleum Exporting Countries and its partners are expected to prolong output cuts into early 2018 at next week’s meeting, the benefit to energy shares will likely be short-lived, say investors and analysts. “We don’t think the oil price will go much higher so there isn’t enough room for energy stocks to rally,” Simon Wiersma, an Amsterdam-based investment manager at ING Bank NV, which oversees about 26 billion euros ($29 billion), said by phone. “The positive response to the output cut may disappear or water down because there’s always the question over which countries will follow through on the production cuts.”
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Not even an extended OPEC deal may suffice to end the woes of this year’s worst-performing equities in the world. Oil stocks have tumbled 6.4 percent this year, the only group to decline in the MSCI All-Country World Index. While the Organization of Petroleum Exporting Countries and its partners are expected to prolong output cuts into early 2018 at next week’s meeting, the benefit to energy shares will likely be short-lived, say investors and analysts. “We don’t think the oil price will go much higher so there isn’t enough room for energy stocks to rally,” Simon Wiersma, an Amsterdam-based investment manager at ING Bank NV, which oversees about 26 billion euros ($29 billion), said by phone. “The positive response to the output cut may disappear or water down because there’s always the question over which countries will follow through on the production cuts.”
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