Energy stocks could be set for another big year in 2022, according to Fundstrat's Tom Lee. Stocks tied to oil have been big winners in 2021, with the Energy Select Sector SPDR Fund gaining 47% year to date. Fundstrat's Tom Lee, who called the bottom in stocks in March 2020 and has remained bullish since, said on Monday the sector could see a similar gain in the new year for three reasons, starting with rising oil prices. "Oil's structural deficit — the supply versus demand gap — is actually going to get bigger in 2022. So I think the market can no longer ignore that oil has price support and could get into the 100s," he said on CNBC's " Halftime Report ." "I think energy stocks, which are under-owned, are better managed — they're producing a lot of cash flows — and now they're cheap relative to oil," he added, citing these as the second and third pillars backing his prediction for more gains. "That's three strong reasons for them to really shine next year and outperform FAANG," Lee said. Oil prices steadily rose for much of 2021 as the global economy recovered from the initial stages of the pandemic. West Texas intermediate futures rose above $80 per barrel in November but slid as the news of the Covid omicron variant raised concerns about global growth. The futures were trading near $75 per barrel on Monday. The Biden administration also called for antitrust scrutiny on energy companies as rising oil prices put upward pressure on inflation, but Lee said that was not a major concern for oil prices. "Jawboning by policymakers might tank oil for a week, but at the end of the day it is supply-demand that is helping to set the price," Lee said. Overall, Lee sees potential double-digit gains for stocks in 2022 but warned that it could be a "treacherous" year for investing, especially in the first half.
Tom Lee, Fundstrat Global Advisors
Scott Mlyn | CNBC
Energy stocks could be set for another big year in 2022, according to Fundstrat's Tom Lee.