Oil Prices Lead an International Renaissance
Despite talk of a trade war, an OPEC-Plus agreement to boost oil production starting this summer and a rally in the US dollar, Brent oil prices ended the second quarter just under $80/bbl, the highest level since late 2014.
Even better, energy stocks were the top-performer in the S&P 500 for the second quarter with the S&P 500 surging 13.5% compared to a gain of just 3.4% for the S&P 500.
Over the past few years, oil prices and energy stocks have experienced numerous false dawns when investor attempted to call a bottom only to get burned as it became clear supply and demand fundamentals for oil remained weak.
We continue to believe this move is for real and, unlike most rallies over the past few years, it’s supported by real improvements in fundamentals. And, ironically, the OPEC-Plus agreement to boost output in late June may be the most bullish development for the energy patch in more than 4 years.
However, dangerous abound due to rapid changes underway in the global energy patch and it remains important to be selective.
Endangered Dividends List
Energy & Income Advisor sifts through literally hundreds of energy companies from around the world to separate the best from the rest. You can check out key metrics for each along with our comments and advice in the tables under the “Portfolios” tab on the EIA website.
The current issue features an updated look at the stocks we cover. Unfortunately, we found a large number of companies we track are still at risk to dividend cuts, along with a handful that are genuine bankruptcy risks.
Many of these weaklings have already cut their distributions at least once since oil prices peaked in mid-2014. As a result, they trade at much lower levels than just a few years ago.
In an unforgiving market like this one for energy stocks and particularly MLPs, however, another cut would still set off a selling wave. And that’s at the same time stronger companies that have taken their lumps are making gains.
The upshot is we want to avoid at risk dividends now as much as ever. To provide an early warning system, we’re initiating ourEnergy & Income Advisor Endangered Dividends List with the 16 companies in our table.
05/07/18: Taking Action
First-quarter earnings season is in full swing. Recently reported results have prompted us to change our ratings for two positions in the MLP Portfolio’s aggressive sleeve.
Roger Conrad & Elliott Gue’s Oil Price Predictions for the rest of the year
Although we became bullish on oil prices last summer when the commodity slipped into the $40s per barrel, our forecast for West Texas Intermediate (WTI) to average between $60 and $65 per barrel appears conservative—especially in an environment where involuntary supply disruptions and robust demand growth could result in short-term spikes to $80 per barrel.
04/26/18: Streaminlining Before Simplification
We share our take on EQT Midstream Partners LP and EQT GP Holdings LP’s first-quarter results, their “streamlining” transactions annoucned today and the outlook for an eventual simplification deal.
03/09/18: Downgrading to Hold
This master limited partnership has turned it around before, but investors shouldn’t double down on this name.
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Live Chat with
Elliott and Roger on Jul. 26, 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
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Elliott H. Gue
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor
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Roger S. Conrad
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor