But experts say oil and gas companies are still good investments.
Susannah Streeter of Hargreaves Lansdown said investors were “clearly concerned about the share of the profits from the energy majors, which could mean that dividends will be temporarily reduced,” but added that the profits were large enough to mean they were still the selection of income. – Stock generation.
Brent crude, the international benchmark, has risen more than 50% since the beginning of the year, driven by the outbreak of war in Ukraine. These prices are expected to remain high as demand continues to outstrip supply.
Energy companies will benefit from the current imbalance, and prices and demand are expected to remain high. Investors who hold the shares can earn, he added.
“Demand is alive and well, with the Chinese economy opening up after Covid slowed down just as the ‘driving season’ begins in the United States, with millions of Americans willing to release the accumulated demand for travel.” going on a trip during the summer, “said Ms. said Streeter.
Richard Hunter of Interactive Investor said the extraordinary income tax has had a limited impact on stock prices so far, but that it would have consequences for companies.
“There may be wider implications of the unexpected tax, with BP reviewing its investment in the North Sea,” he said.
“Meanwhile, perhaps more troubling is the multimillion-dollar cost that will affect both BP and Shell following their decisions to exit Russian operations.”
However, investors should not rush into exits too soon. Shares of BP have risen 34% year-over-year and Shell 48%, backed by generous dividend yields of 4.1% and 3.3% respectively, Hunter said.
“The market consensus for both stocks remains on a good buy, suggesting that investors are content with the current wave of an oil price where the balance between demand and supply is far from arrive, “he added.