"We believe that the oil companies are on a" sweet spot ", where both have good sales from the oil price, but also keep costs under control in contrast to the previous cycle, because it was the oil service companies that made the most of the positive to suffer, "said Paul Harper, DNB Markets.
That is why he is including the Equinor energy company in the portfolio of DNB Markets this week. The Equinor share was traded on NOK 231 at Oslo Børs on Monday, an increase of 35 percent so far this year.
– Equinor has undergone positive estimation adjustments since mid-2017 and now that oil prices continue to evolve positively, there will be greater exposure to energy in the portfolio. Equinor prices have also improved after estimates have increased throughout the year, "Harper said.
Betting on Frontline
Oil companies rose sharply last week on the Oslo Stock Exchange, after the oil price rose to more than 82 dollars. Equinor ended about six percent.
"Last week, the return on the portfolio was worse than the market, partly because we only had a share in the portfolio, which is what we are trying to do in part," Harper explains.
The tanker company Frontline of John Fredriksen is also included in the portfolio this week.
"We have seen that tank rates are being strengthened, and that trend tends to continue in the fall, so it is the beginning of a strong seasonal season for the tanker sector, and with the oil price where it is, there is also a greater chance that either the OPEC members will start to cheat quotas or they will choose to increase production at a certain moment, says the shareholder.
In contrast to DNB markets, competitors Sparebank 1 Markets and Arctic Fund Management chose to invest in oil stocks last week.
The oil company DNO generated a return of 8.5 percent on Sparebank 1 Markets, while the seismic company Spectrum yielded a yield of 7.7 percent. The oil company Aker BP gave Arctic a yield of 10.8 percent.
"Can not exclude profitability"
Strategist of DNB Markten According to Harper, Oslo Børs looks overhand in the short term after the share price.
"We are prepared to make it a quieter week and if something else happens on a global scale, we can not exclude profitability.After a strong rebound, one must always be prepared for a one-time rebound, says the shareholder.
He points out that the so-called RSI of Oslo Børs is now 71.
"For this reason we have slightly more modest expectations in the short term, but it will be crucial what happens to the oil price.
The Relative Strength Index (RSI) is used to identify stocks that have risen or dropped sharply without the correction being made. This may indicate a decrease or increase in inventory. RSI is measured on a scale from 0 to 100, under 30 is "sold over" and more than 70 has been "bought over".(Conditions)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our business with a link that leads directly to our pages. Copying or any other use of all or part of the content may only take place with written permission or as permitted by law. See here for further conditions.