Jan 3, 2022 - Economy

Biggest recovery winner: energy prices

Change in price of selected assets
Data: S&P Global Market Intelligence; Chart: Will Chase/Axios

Energy prices soared more than just about any asset class since the market's rock-bottom in March 2020.

Why it matters: Economists view the surge as a potential threat to the ongoing economic recovery.

By the numbers: Three of the five top-performing asset categories since March 23, 2020 — the lowest point of the bear market — are energy-related, according to data from S&P Global Market Intelligence.

  • Fuel prices rebounded so massively in large part as a result of “an exceptionally rapid global economic recovery … a cold and long winter in the Northern Hemisphere, and a weaker-than-expected increase in supply,” analysts with the International Energy Agency write.

The big picture: Energy production and investment had already been failing to keep up with demand prior to the pandemic. 

  • The health crisis dragged new oil and gas investment to a near-record low, intensifying the imbalance between supply and demand, according to the IEA, per Bloomberg.

On the flip side: Of more than 70 asset groupings that S&P examined for Axios — including international indexes, commodities and precious metals, and fixed income instruments — only five categories declined in price, most of which were related to U.S. treasurys.

  • S&P used the price of ETFs managed by iShares to track the relevant treasury categories.
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