Profits of companies that are part of the pan-European STOXX Europe 600 stock index are expected to increase by about three percent this year. This was predicted today by the US investment bank Goldman Sachs.
Oil price as the main reason
The bank said the improved outlook was due to higher oil prices, which are boosting oil company profits. However, the bank cautioned that after accounting for inflation, profits are likely to show a 2 percent decline.
Goldman Sachs expects the price of North Sea Brent crude to be $88 a barrel at the end of this year. It also predicted that oil prices will reach $100 a barrel by the end of next year.
A rise of about six per cent
Oil prices have risen by around six percent since the outbreak of the conflict between the Palestinian Hamas movement and Israel, with Brent currently close to $90 a barrel. This has led to a significant appreciation in the shares of European oil and gas companies BP, Shell and TotalEnergies. On Monday, shares in European oil and gas companies climbed to a nine-year high.
The STOXX Europe 600 index has gained about six percent since the start of this year. Last year, the index fell 12.9 percent, its worst performance since 2018.
Source Czech Press Office