• 4 minutes Nord Stream 2 Halt Possible Over Navalny Poisoning
  • 8 minutes America Could Go Fully Electric Right Now
  • 11 minutes JP Morgan says investors should prepare for rising odds of Trump win
  • 1 day Daniel Yergin Book is a Reality Check on Energy
  • 2 days Permian in for Prosperous and Bright Future
  • 1 day Famine, Economic Collapse of China on the Horizon?
  • 1 day Oil giants partner with environmental group to track Permian Basin's methane emissions
  • 4 hours US after 4 more years of Trump?
  • 2 days YPF to redeploy rigs in Vaca Muerta on export potential
  • 2 days Gepthermal fracking: how to confuse a greenie
  • 12 mins Something wicked this way comes
  • 2 days Top HHS official takes leave of absence after Facebook rant about CDC conspiracies
  • 3 hours Why NG falling n crude up?
  • 4 hours The Perfect Solution To Remove Conflict Problems In The South China East Asia Sea
  • 1 day Open letter from Politico about US-russian relations
  • 3 days Surviving without coal is a challenge!!
The Electrification Of UK Offshore Oil & Gas

The Electrification Of UK Offshore Oil & Gas

Electrification of oil and gas…

The Secret To Survival For Canada’s Oil Sands

The Secret To Survival For Canada’s Oil Sands

Canada’s oil sands are often…

What’s Next For Gold?

What’s Next For Gold?

The Fed recently issued a…

Martin Tillier

Martin Tillier

More Info

Premium Content

Bottom Fishing For Oil Stocks? Stick To The U.S.

Making any assumption about the price of oil right now is risky, or some might even say crazy. Still, with WTI having found at least a temporary bottom around $50 and with an agreement to cut production by OPEC and the other signatories to the previous such deal looking on the cards, many will no doubt be considering oil stocks. They would almost certainly benefit from a recovery in price should a deal be announced, but there is also another reason energy stocks make sense at these levels. The drop in those stocks, and in oil itself, has been largely about pricing in risk, so it is reasonable to assume that said risk is now accounted for, which limits the downside. Of course, there is still risk to be considered though, and the normal way of reducing that risk, buying the large, integrated multinationals, may not be the best strategy this time.

The theory behind that strategy is sound. Companies like Exxon Mobil are not just involved in oil production. They also refine, distribute and retail oil and its derivatives which gives them some degree of cushion against price volatility. The point here though is that if you are thinking about buying the sector at all, you have to believe that crude is going to recover, or at least is not going much lower. That obviously negates one reason for buying the big firms’ stock, and the other, that international exposure also lessens risk, is even less convincing when you consider the evidence.

U.S. stocks have been volatile…





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News