The prospect of deep cuts in production has sparked a bounce in oil prices. And at least for the moment, crude is trading over $20 a barrel again across North America, with global benchmark Brent in the upper 20s.
The real action, however, has been in energy stocks, which have literally vaulted from last to first in terms of S&P 500 sector performance. The S&P 500 Energy Sector Index is more than 50 above its March 18 low. The super majors-focused NYSE Arca Oil Index (NYSE: XOI) is up 55 percent plus. And the midstream-heavy JP Morgan Alerian MLP Index ETN’s (NYSE: AMJ) has exploded upward more than 80 percent.
None of these indexes are close to erasing year-to-date-losses, let alone declines since this energy down cycle began in mid-2014. But they’re clearly demonstrating the upside leverage survivors will have in the eventual recovery.
We’ve laid out a cornerstone strategy to build positions in the best in class energy companies from wellhead to the burner tip. Success will depend in part on seeking out the lowest possible entry points. And we think we’ll get them this year, as gloomy economic reality sinks in and the overall stock market very likely tests the March lows.
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 Jun. 29, 2022