War. What is good for? Well, in the case of the energy sector, rising prices. Ever since the 1970s and the Oil Embargo, oil and natural gas have long traded with a so-called ‘war premium.’ Geopolitical conflicts have added to the underlying risk and per-barrel price.
And it looks like the war premium is back on the menu.
Due to conflicts within the Middle East, oil prices have steadily marched higher and now analysts have predicted that prices will once again hit $100 per barrel. This is great news for the energy sector, which has faced dwindling demand for refined products and lower average selling prices. For investors, it could lend plenty of support for the sector’s dividends and growth in the medium term.
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