Recession fears have contributed to the recent consolidation in oil prices. Still, strategists at TD Securities highlight their confidence in the uptrend in energy markets.

Supply risk insulation

“Recession fears are weighing on energy markets, leading to a consolidation, but the uptrend in oil markets benefits from a substantial margin of safety.” 

“As long as Brent crude prices remain above the $87/bbl mark, oil bulls should hold onto their conviction in oil's uptrend.” 

“The margin of safety also remains elevated into year-end, reflecting our view that even in a recession, oil prices could remain elevated as energy supply risk continues to soar.”