Update on a recent, well-performing CDS relval trade, which should be further supported by the IEA's recents statements on the 'future' of oil and gas exploration.
(19 May 2021)
We believe a market neutral relative value trade combining a credit short on French oil major Total (versus a long on Norwegian oil major Equinor could be attractive. From the perspective of a world locked into rapid climate change, Equinor’s near monopolistic access to arctic production facilities (and added benefits from receding ice shelf) trumps Total’s large exposure to hydrocarbon production in areas more likely to succumb to severe physical climate change risks as well as rife with social conflict.
(2 March 2021)