Whether or not you believe OPEC can defeat its history and agree and observe a production cut, there is still a case for energy stocks. The reasoning is that energy stock prices continue to hold a risk premium for future oil shocks. As the oil price stabilises, this risk premium should be removed – meaning energy shares can rise whether or not the oil price goes higher.

In previous chats about energy shares we’ve looked at the desirability of natural gas in a carbon constrained universe. Investors who are already full with Woodside and Oilsearch may dig deeper into the sector – and find Beach Energy (BPT). Alert readers will notice I’ve skipped over Santos. In my view their assets are old and poorly run. For Cooper Basin exposure, and a better oil/gas mix, I prefer Beach.

And by the look of the chart, so do traders. However the down trend line is drawn, it is clearly broken. Yesterday’s solid gain may see some investors waiting for a pullback to around 60 cents. However, the action can be construed as a break out, and BPT may not look back from this point.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.