Although the price of West Texas Intermediate (WTI) crude oil has rallied above $50 per barrel in recent weeks, the risk-reward balance for the commodity skews to the upside over the next six to eight months.
The decline in the US oil-directed rig count signals that producers have reined in their horns a bit, while Libya and Nigeria—both of which continue to produce near peak levels—remain prone to security-related disruptions. Meanwhile, the socioeconomic and political environment in Venezuela continues to deteriorate.
Against this backdrop, we’d argue that WTI could approach $60 per barrel over the coming six to eight months, though this move won’t occur in a straight line and the timing remains uncertain.
Shares of exploration and production companies have responded to the rally in oil prices and enticed value-oriented investors to rotate into the space, propelling some stocks to valuations that would keep us on the sidelines.
Your complete guide to energy investing, from growth stocks to high-yielders.
In October 2012, renowned energy expert Elliott Gue launched the Energy & Income Advisor, a twice-monthly investment advisory that's dedicated to unearthing the most profitable opportunities in the sector, from growth stocks to high-yielding utilities, royalty trusts and master limited partnerships.
Elliott and Roger on Sep. 26, 2017
Balanced portfolios of energy stocks for aggressive and conservative investors.
Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.
Our assessment of every energy-related master limited partnership.
Roger Conrad’s coverage of more than 70 dividend-paying energy names.