• 4 minutes England Running Out of Water?
  • 7 minutes Trump to Make Allies Pay More to Host US Bases
  • 10 minutes U.S. Shale Output may Start Dropping Next Year
  • 14 minutes Washington Eyes Crackdown On OPEC
  • 3 hours One Last Warning For The U.S. Shale Patch
  • 14 hours Russian Effect: U.S. May Soon Pause Preparations For Delivering F-35s To Turkey
  • 6 hours China's Expansion: Italy Leads Europe Into China’s Embrace
  • 11 hours Chile Tests Floating Solar Farm
  • 51 mins Poll: Will Renewables Save the World?
  • 3 hours China's E-Buses Killing Diesel Demand
  • 22 hours New Rebate For EVs in Canada
  • 3 hours Trump sells out his base to please Wallstreet and Oil industry
  • 13 hours Biomass, Ethanol No Longer Green
  • 13 hours Trump Tariffs On China Working
  • 1 day Boeing Faces Safety Questions After Second 737 Crash In Five Months
  • 1 day The Political Debacle: Brexit delayed
  • 20 hours 3 Pipes: EPIC 900K, CACTUS II 670K, GREY OAKS 800K
  • 15 hours Read: OPEC THREATENED TO KILL US SHALE

One To Buy On The Dip

The last month or two have seen energy stocks, and oil and gas exploration and production (E&P) stocks in particular, become the victims of a “perfect storm.” Oil prices, on which the value of their assets is based, have been steadily falling. The stock market in general has been under pressure as traders anticipate the end of Quantitative Easing by the Federal Reserve, which also raises the prospect of higher interest rates. That is bad news for E&P companies that are generally quite highly leveraged due to the high upfront costs of acquiring land and then drilling for oil and gas. With their assets losing value, their stock being dragged down by general market weakness and the prospect of higher borrowing cost on the horizon it is little wonder that most have fallen precipitously.

When faced with a falling market such as this, however, investors would do well to heed the words of the “Sage of Omaha”, Warren Buffett. He once famously said that we should be “…greedy when others are fearful…” and on a Thursday morning appearance on CNBC’s Squawk Box he showed what that means. Buffett revealed that his Berkshire Hathaway (BRKA; BRKB) had been buyers during the big drop on Wednesday. When asked if he was worried that the market would continue to fall he responded that the opposite was true. He hoped it would fall further so that stocks would be even cheaper next week.

Of course, not all of us have the…




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