Berenberg says 'buy' energy, highlights Shell

They said they were struck by the lack of outperformance by the sector on either side of the Pond despite the recovery in crude oil prices.

Hence, they argued, the sector now looked "cheap" with the European majors changing hands on 2021 price-to-earnings multiples of 8.5 and free cash flow yields of more than 15%.

The favourite names in the space of the head of the broker's Oil and Gas team were Royal Dutch Shell and Equinor.

"We understand the case for outperformance, but it is likely conditional on macro outcomes, beyond oil prices. Energy outperformance needs: 1) synchronised global growth to extend into 2022; and 2) rising bond yields over the coming six-12 months."