Now is another in a line of critical moments in oil pricing – and an equally critical moment in establishing your long-term energy portfolio. We’re currently getting the rebound downwards reaction to the nonsensical proposals of production ‘freezes’ from the Saudis and Russians, along with a naturally bearish response to the upcoming OPEC meeting on April 17th.
If you’ve been following me and my advice, you’ve been accumulating a core long-term portfolio of ‘survivor’ shale players and the odd major, and you’re mostly free from investments in refiners, oil services and offshore. All of the medium-term plays that we used to capitalize on the rally in oil prices from the low 30’s to just above $40 have been cashed to good effect in Devon (DVN), Hess (HES) and Pioneer Natural Resources (PXD).
Another OPEC meeting is pushing oil prices and the prices of oil stocks lower, as they have the previous two times that OPEC met. It is clear that the market’s expectations remain for no new curbs on production. Even the idea of a freeze of Saudi and Russian production was always fairly toothless, as both are at or very near their production limits now, in my view.
But I have said that I believe the oil bottom is in for the long haul, even if the trajectory of oil doesn’t get noticeably constructive for another 4-10 months. That means that I also believe that any drop of oil prices nearer to the downside…