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Elliott Gue knows energy. Since earning his bachelor’s and master’s degrees from the University of London, Elliott has dedicated himself to learning the ins and outs of this dynamic sector, scouring trade magazines, attending industry conferences, touring facilities and meeting with management teams.

Elliott Gue’s knowledge of the energy sector and prescient investment calls prompted the official program of the 2008 G-8 Summit in Tokyo to call him “the world’s leading energy strategist.”

He has also appeared on CNBC and Bloomberg TV and has been quoted in a number of major publications, including Barron’s, Forbes and the Washington Post. Elliott Gue’s expertise and track record of success have also made him a sought-after speaker at MoneyShows and events hosted by the Association of Individual Investors.

Elliott Gue also contributed chapters on developments in global energy markets to two books published by the FT Press, The Silk Road to Riches: How You Can Profit by Investing in Asia’s Newfound Prosperity and Rise of the State: Profitable Investing and Geopolitics in the 21st Century.

Prior to founding the Capitalist Times, Elliott Gue shared his expertise and stock-picking abilities with individual investors in two highly regarded research publications, MLP Profits and The Energy Strategist, as well as long-running financial advisory Personal Finance.

In October 2012, Elliott Gue launched the Energy & Income Advisor, a semimonthly online newsletter that’s dedicated to uncovering the most profitable opportunities in the energy sector, from growth stocks to high-yielding utilities, royalty trusts and master limited partnerships.

The masthead may have changed, but subscribers can expect Elliott Gue to deliver the same high-quality analysis and rational assessment of investment opportunities in the energy patch.

Articles

Oil Prices and Geopolitics

The financial media tends to exaggerate the influence of geopolitical developments on oil prices, especially to explain daily moves in these commodities. But today’s market hold more in common with the 1990s, when the price of West Texas Intermediate crude oil actually declined at the height of the Gulf War.

Tackling the Big Questions

All the upheaval in global energy markets has many investors scratching their heads about what the future holds for oil and gas prices, what to do with their existing positions in this sector and which groups within the space look attractive at current valuations.

Making sense of the constantly shifting energy landscape becomes all the more challenging in a 24-hour news cycle where history is dead, sensationalism rules the day and the loudest (or most controversial voices) get the most attention–regardless of their track record or the validity of what they’re saying.

Over the past year, we’ve consistently warned that elevated US oil inventories and steady production would squeeze oil prices lower in the fall and winter–a period of seasonally weak demand when many refiners idle capacity for upgrades and maintenance.

Our three-part strategy has also remained consistent: Taking advantage of short-lived recovery rallies to exit risky positions; hedging remaining energy exposure through positions in inverse exchange-traded funds, airlines, cruise operators and convenience stores; and waiting patiently for an opportunity to buy select names at dream prices.

This buying opportunity could be around the corner if oil and gas prices tumble further in coming months. Although oil prices remained relatively flat from 1985 to the mid-1990s, select energy stocks managed to outperform the broader market over this decade–a trend that could repeat itself if the price of West Texas Intermediate remains lower for longer.

Oil Prices and Poor Reporting

The financial infotainment industry doesn’t let the facts get in the way of a good story, especially when it comes to the oil market and its complexities. Recent articles hinting that Saudi Arabia and OPEC could reduce oil output to support pricing may attract eyeballs, but they represent shoddy journalism. Elevated inventories and the impending refinery turnaround season suggest that oil prices will suffer another leg down.

Tactical Maneuvers

With few exceptions, energy stocks have been taken to the woodshed this year.

Fortunately, some proactive hedging has helped to offset some of the downside in our Model Portfolios. In January 2014, we began to take profits in some of our riskiest holdings and add exposure to airlines and other industries that tend to benefit from lower oil prices.

In this issue, we reassess our picks in the airline, cruise, convenience store and petrochemical industries in light of the increasing risk of a bear-market correction in 2016.

 

US Natural Gas: Outlook and Investment Guide

We’ve remained bearish on US natural-gas prices for the past several years, asserting that any short-term rallies induced by a cold winter would fail when prices approach $4 to $5 per million British thermal units.

The floor for the commodity sits around $2 per million British thermal units, though elevated inventories and production levels suggest Henry Hub prices could fall below this threshold this winter.

Nothing on the horizon suggests that US natural-gas prices will escape this trading range, while the near-term risks skew decidedly to the downside.

We expect front-month prices at the Henry Hub, the official delivery point for natural-gas futures that trade on the New York Mercantile Exchange, to struggle to top $3 per million British thermal units in 2016. The thermal fuel could also tumble to $1 per million British thermal units or less if a warm winter swells the volume of natural gas in storage.

In this issue, we delve into a handful of popular gas-focused producers, but opt to stand aside on even our favorite names for now. However, a buying opportunity could emerge in coming months if this winter ends up being warmer than usual.

We’re more bullish on midstream names that stand to benefit from growing demand for US natural gas at home and in Mexico.

Gas-Heavy Producers: Still on the Sidelines

With elevated inventory levels, robust production and the potential for an unusually warm winter, even the best-positioned players in the Marcellus Shale could suffer further downside. Here’s our take on a handful of popular gas-focused exploration and production companies, with the write-ups appearing in order of preference. We may consider instituting a dream buy price on one or two of these names in coming months; however, for now, we prefer to remain on the sideline.

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  • Live Chat with

    Elliott and Roger on Nov. 30, 2017

  • Portfolios & Ratings

    • Model Portfolios

      Balanced portfolios of energy stocks for aggressive and conservative investors.

    • Coverage Universe

      Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.

    • MLP Ratings

      Our assessment of every energy-related master limited partnership.

    • International Coverage Universe

      Roger Conrad’s coverage of more than 70 dividend-paying energy names.

    Experts

    • Roger S. Conrad

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Elliott H. Gue

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Peter Staas

      Managing Editor: Capitalist Times and Energy & Income Advisor