Last December, when the S&P 500 was sitting near all-time highs, Tom Lee made another non-consensus forecast: While warning the first half of this year would be “treacherous,'' he highlighted Energy as a key component of his 2022 strategy. On Dec. 21,2021, he told more than 1,000 members that the sector still had plenty of room to run. 

“There's a structural shortage in oil,” Lee said six months ago. “No matter how much drilling starts now, we have a two-year deficit of falling production, so it's going to take quite a long time to bring supply and demand into alignment. Energy stocks are trading cheap to oil. They're managing capital very carefully. So, you're in a win-win situation as an equity holder, and they're not widely owned, so it's still very non-consensus. We like Energy. We see improving relative performance.”

Mark Newton, our head of technical strategy, echoed Lee a few weeks later, sharing that he believed Energy would outperform and enjoy a multi-year bull run. “It’s a phenomenal group for the next few years,” Newton said in January. “Energy is going to be the right place to be.”

At the time, much of Wall Street had braced for a pullback, given Energy’s outperformance in 2021. But nearly six months later, oil and gas prices ...

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