Brent crude is trading above 80 dollars per barrel again following tensions between the United States and Iran. Stocks in the oil and gas sector are rising on the stock market, but analysts recommend caution.
The price of Brent crude has once again surpassed the 80 dollar per barrel mark, driven by escalating geopolitical tensions between the United States and Iran. This surge has rekindled interest in stocks in the oil and gas sector, which are trading higher on major European stock exchanges, including Spain.
However, analysts warn that the stock market context remains fragile. The lack of consensus in the market and low liquidity make it difficult for the crude surge to translate into a sustainable upward trend for oil companies.
How high can oil go?
The price of Brent has skyrocketed above 80 dollars after the United States hardened its stance against Iran, raising fears of supply disruptions in the Middle East. Nevertheless, Ho Huu Tuan Hieu, head of investment strategy at SSI Securities, believes that the current impact is not as intense as in April, when a similar peak occurred.
Shipping and logistics companies have proactively readjusted their routes, which reduces the risk of supply chain disruptions. This limits the short-term bullish effect on crude oil.
For investors interested in the sector, the key is not to get carried away by geopolitical noise. Rapid oil price increases are often volatile and do not guarantee sustained appreciation of related stocks.
Recommendations for investing in oil companies
Brokerage firms agree that the market is trading in an environment of technical uncertainty. TPS Securities notes that the range of 1,780-1,800 points acts as a key support level, coinciding with the 200-session moving average. If the index remains in this zone, a technical rebound could occur.
Conversely, losing that support could prolong the correction. SHS Securities warns that if the index falls below 1,770-1,780 points, selling pressure would intensify, potentially leading to margin adjustments. A negative scenario could drive the index down to 1,750 points, from where it could recover if it enters oversold territory.
In this context, experts recommend limiting new purchases and prioritising risk management. According to Yuanta Securities, the index remains below the 5-day moving average (1,811 points), indicating that the risk of correction persists. Short-term investors should take advantage of price increases to reduce positions.
For retail investors, the practical recommendation is to not rush to buy oil stocks solely because of the crude surge. It is wise to wait for the market to show clear signs of balance, with greater liquidity and capital inflow.
BIDV Securities adds that if the index fails to maintain above the 200-day average, it could fall to 1,760 or even 1,719 points. The price/earnings ratio of the index stands at 13.7 times, below the average of the last ten years (15.3 times), suggesting that valuations are attractive in the medium to long term.
In summary, the oil surge offers a tactical opportunity, but it is not without risks. The prudent approach is to maintain a diversified portfolio and not to bet everything on a sector that, for now, relies heavily on unpredictable geopolitical factors.
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