Oil prices rose for the fifth straight week, hitting seven-year highs on January 19 amid increasing geopolitical risks and a global supply crunch. This trend will likely continue as the cold snap and frequent winter storms drive energy demand. In addition, the current tension between the United States and Russia over Ukraine and worsening Middle East troubles could send oil prices higher. Against this backdrop, Barclays has raised its median oil price forecast by $5 to $85 for 2022.
According to the FactSet data, the energy sector grew more than 50% in 2021 on the resumption of travel. The bullish investor sentiment surrounding the industry is evidenced by the Energy Select Sector SPDR ETF’s (XLE) 49.75% returns over the past year.
