• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 9 hours EU has already lost the Trump vs. EU Trade War
  • 12 mins Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 5 hours Climate Change Consensus Shifts in Wind, But Gas Is Still the Right Move
  • 17 hours Judge Orders Trump To Release Tax Returns
  • 6 hours World oil demand will keep growing until 2030, climate-damaging emissions longer, says IEA
  • 12 hours Shale Gas News – November 9, 2019
  • 14 hours ''Err ... but Trump ...?'' #thedonkeystays
  • 1 hour Iran's Master Plan?
  • 8 hours Does .001 of Atmosphere Control Earth's Climate?!
  • 1 hour Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 18 mins Iran Finds New Oil Field With Over 50 Billion Barrels: Rouhani
  • 17 hours The lies and follies of the "cry wolf" enviros: No more fire in the kitchen: Cities are banning natural gas in homes to save the planet
  • 7 mins Saudi Aramco IPO Will Not Save Kingdom
  • 8 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
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
Download on the App Store Get it on Google Play