Natural gas never managed to break $2 per thousand cubic foot and oil prices actually went negative. So Q2 results for energy companies were never going to be pretty. And with Covid-19 uncertainty still a threat up and down the value chain, it’s little surprise second half 2020 guidance has remained cautious.
Nonetheless, we’re seeing unmistakable signs of resilience, as well as the green shoots of recovery. And both are good reasons to buy best in class energy stocks, which continue to offer their most attractive yields in memory.
One of the green shoots is what appears to be the first monthly rise in North American hydraulic fracturing activity in months, with the final count returning to levels not seen since April. July activity has been particularly robust in the Permian Basin. But there are some signs of improvement elsewhere also, including the Anadarko (Oklahoma), Bakken, Eagle Ford (Texas) and Niobrara (Colorado) regions.
Increased oil drilling activity apparently hasn’t been matched in natural gas. But there’s still some good news, with US exports to Mexico hitting a new all-time monthly high in June. This month, daily flows actually topped 6 billion cubic feet per day for the first time ever. That compares with roughly 4.7 Bcf/day in April and May.
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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. 30, 2020
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