Energy sector gets a lift from Europe’s pledge to buy some $750 billion in US oil and gas
Analysts are pretty skeptical this is possible.
Energy shares are outperforming and helping keep the S&P 500 in the green early Monday, after the EU said European companies would purchase some $750 billion in US energy products like oil and gas over the next three years as part of a preliminary EU-US trade agreement announced over the weekend.
Cheniere Energy and Venture Global, producers of liquified natural gas, rose on the news, as did oil and gas explorers APA Corporation, EOG Resources, and Diamondback Energy.
But some of the initial strong gains in such US energy stocks have ebbed away, as there is a lot of skepticism that the EU would be able to meet such a large goal for imports of US energy.
One opinion piece from Reuters called it “delusional.” Bloomberg said it looked “hard to reach,” and quoted one analyst who said called the number “meaningless, as it’s unachievable not only because EU demand cannot grow that much, but also because US exporters cannot supply that much either.”
It’s also important to note that despite the handshake photo op, nothing that US President Donald Trump or European Commission President Ursula von der Leyen said over the weekend is actually a written, binding agreement, which would be the traditional definition of an actual deal.
