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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

Embracing Relative Strength and Avoiding the Land Mines

Oil prices fell alongside the stock market during the late January to early February selloff as part of a global risk-off trade. Oil prices have also recovered alongside the S&P 500 since the Feb. 9 low.

We remain sanguine about crude-oil prices over the short to intermediate term. Backwardation in the Brent futures curve continues to point toward a tight supply-demand balance. Twelve-month Brent futures trade at a discount of $3.76 per barrel to the front-month contract, just off the January high of $4.56 per barrel.

That said, we don’t expect oil prices to rally to $70 or $80 per barrel. Such a move would be self-defeating, as the surge in shale production would overwhelm demand.

At the same time, we don’t expect a repeat performance of last year’s big selloff back into the $40s per barrel. OPEC and Russia remain disciplined on their supply agreement, and tight labor and services markets in the North American oil patch are raising costs for shale producers. At the same time, investors are demanding greater capital discipline, which means producers require higher prices to incentivize stepped-up activity.

Recent disruptions in Libya and plummeting Venezuelan production—down 300,000 barrels per day since September alone—represent additional potential upside catalysts for oil prices this year. We expect WTI to average about $60 per barrel this year.

Although the upside potential in oil prices appears limited, energy equities offer a better risk-reward proposition. The stocks on our Focus List remain our favorite bets and have held up well in a challenging tape and an earnings season filled with land mines.

Déjà Vu for the Oil Market and Energy Stocks?

Last week’s spike in volatility was difficult for every investor, especially after a period of unprecedented placidity during which many market participants forgot the terror that these swoons can induce, even if US equities were overdue for some profit-taking.

For better or worse, the highs and lows of this down-cycle have accustomed energy-focused investors to bouts of sharp volatility. Nevertheless, the selloff in energy stocks was still harrowing, with the S&P 500 Energy Index giving up all the gains it had chalked up in the first month of the year.

Energy stocks appear to be suffering from a case of déjà vu. Last year, the sharp recovery in US crude production and the oil-directed rig count, coupled with money managers taking profits on their sizable long positions in Brent and West Texas Intermediate (WTI) futures, conspired to send WTI tumbling to as low as $42 per barrel.

On the surface, a similar dynamic is at play today.

 

2018 Macro Outlook

At the outset of each year, the Energy & Income Advisor team reviews its big-picture calls from the previous 12 months and digests the lessons from our successes and failures. This self-reflection on what went wrong and what went right helps us to hone our investment strategy.

We also highlight our outlook for the coming year to set a basic framework that informs our positioning and helps to remove some of the emotion from the investment process. As always, none of our forecasts are set in stone; rather, these views necessarily will evolve as economic and market conditions change over time. In a dynamic market, what’s right at the outset of the year might no longer hold at the midway point.

Recent issues of Energy & Income Advisor have highlighted our outlook for energy stocks, master limited partnerships (MLP), and our International Portfolio. This time around, we’ll delve into four macro topics: the economy, the US equity market, crude-oil prices and natural-gas prices.

 

Outlook for US Equities

he S&P 500 may have reached new highs in 2017, but our call for a bumpier ride couldn’t have been more wrong: The index hasn’t experienced a correction of more than 5 percent since summer 2016—the longest uninterrupted rally in its history. We explain our base case for US equities in 2018.

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  • Live Chat with

    Elliott and Roger on Nov. 29, 2018

  • 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

    • Elliott H. Gue

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

    • Roger S. Conrad

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