Energy will be the big winner of 2023, investor says — and names the stocks to cash in

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Energy stocks had a bumper year in 2022 — it was the best-performing sector by a long mile and is expected to remain a big winner this year, according to investment veteran Louis Navellier. “I am expecting energy stocks to lead in 2023, since they have the strongest forecasted sales and earnings,” Navellier, who is chairman and founder of growth investing firm Navellier & Associates, told CNBC Wednesday. Navellier’s optimism comes amid a slow start for the energy sector. As of Thursday morning, it was the week’s worst-performing sector on the S & P 500 , with a decline of about 3.6% over the last two trading sessions, according to FactSet data. Despite this, Navellier said he remains “very bullish” on the sector. He acknowledged that natural gas prices looked “soft” now because of Europe’s winter heatwave , but stressed the importance of the fact that the U.S. was no longer supporting crude oil prices via releases from the Strategic Petroleum Reserve . As such, it’s now time for “seasonal demand to start pushing up crude oil prices,” Navellier told CNBC’s “Street Signs Asia.” He expects crude prices to “easily rise” above $100 per barrel in the coming months, and eventually hit $120 per barrel during peak demand. On Thursday morning, international benchmark Brent crude futures traded around $79 a barrel, while U.S. West Texas Intermediate futures were around $74 a barrel. ‘Energy renaissance’ Navellier believes energy’s outperformance last year — driven by high oil and natural gas prices on the back of supply disruptions and a strong rebound in demand — has further to go. “We are now in an energy renaissance where the world had rediscovered the importance of fossil fuels as the G-7 strives to break away from Russian energy,” he told CNBC in notes on Dec. 20. He expects energy stocks to eventually comprise approximately 30% of the S & P 500 , up from the current 6%. While Navellier likes stocks with exposure to the clean energy transition, he acknowledged that the shift toward renewables will be a lengthy process. “We obviously have green stocks like Enphase Energy or SQM , which mines lithium in Chile. But the truth of the matter is, the green energy revolution is going to take decades longer than my lifetime and fossil fuels are very important. I think last year fossil fuels were 84% of the world’s energy consumption. Two years ago, there was only 80%. So, we are actually going up on fossil fuel consumption right now,” he said. Other stocks liked by Navellier include Phillips 66 , Greek liquefied natural gas carriers operator GasLog Partners , petroleum refiner PBF Energy and Atlanta-based oilfield services provider RPC .

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