The energy sector has come under pressure this month but it's still one of the top-performing groups for 2021, and billionaire investor Leon Cooperman believes there's more upside ahead. "I'm having a good year because I came into the year overweight energy," the chairman and CEO of Omega Family Office said Tuesday on CNBC's "Halftime Report." "Supply and demand for energy is still going to be relatively tight," he added. West Texas Intermediate crude futures declined 7.5% on Monday but are still up 38% this year amid a recovery in demand. In April 2020 WTI briefly dipped into negative territory as the pandemic ground worldwide economies to a halt, also sapping demand for petroleum products. As economies have begun to reopen, producers have withheld output. This has created a floor for prices, and also led to calls that supply might not be able to keep up with demand. The International Energy Agency said earlier in July in its closely watched monthly oil market report that demand in June stood at 96.8 million barrels per day, while supply was at 95.6 million barrels per day. "There's not a lot of spare capacity around the world. The economy grows: supply/demand will tighten up," Cooperman added. Energy stocks have come under pressure recently and the group is currently in correction territory after falling about 13% from the recent high on June 15. But the sector is still up 27% for the year amid the recovery in oil prices. Cooperman noted that he thinks companies will be "very careful" in terms of how they spend their money, especially as ESG investing gains further traction. Cabot Oil & Gas and Paramount Resources are among the stocks Cooperman bought on Monday during the sell-off. "[Paramount Resources] in another year could be debt free, selling at less than four times cash flow and with a substantial resource base," he said.
Olivia Michael | CNBC
The energy sector has come under pressure this month but it's still one of the top-performing groups for 2021, and billionaire investor Leon Cooperman believes there's more upside ahead.