Energy is now Europe’s top-performing sector this year, with a 12-percent gain for the sub-index early on Monday, after bank stocks fell on the Russia-Ukraine conflict, pulling down the bank index to an 11-percent year-to-date gain.
Financial stocks in Europe plunged early on Monday as tensions over Ukraine escalated, amid worries that prospective penalties against Russia over a Ukraine invasion would harm the European banking industry, oilprice.com writes.
At the same time, energy companies have done strongly in recent weeks, due to rising oil prices and majors reporting multi-year high earnings and cash flows for the fourth quarter and full year of 2021.
According to Bloomberg, the STOXX Europe 600 Banks index lost 4.6 percent on Monday. As of early Monday EST, the index has gained 11% year to date.
The STOXX Europe 600 Energy index has risen 12.3 percent year to date.
As worldwide crude oil prices have risen to $90 and beyond, shares in key European oil companies have surged, offsetting share price declines caused by the epidemic.
The main oil companies in Europe, Shell, BP, and TotalEnergies, have already compensated all of the losses in their share prices acquired since the start of the epidemic, or are very near to doing so, Bloomberg says.
Blockbuster earnings from Big Oil for Q4 and 2021, as well as oil prices rising over $90 per barrel, have helped oil majors’ equities move higher in recent weeks.
Shell announced $6.4 billion in net profits for the fourth quarter of 2021 and $19.29 billion in earnings for the whole year, up from $4.8 billion in 2020, in what CEO Ben van Beurden hailed as a “momentous year.” Last week, BP declared its greatest annual net profit in eight years, while TotalEnergies projected a net profit of $16 billion for 2021, the largest in almost a decade.