Nevertheless, our outlook has called for natural gas to remain volatile but range-bound, as spikes toward $3 per million British thermal units (mmBtu) will sow the seeds of their destruction by incentivizing production growth and prompt electric utilities to switch from gas to coal. Conversely, moves below $2 per mmBtu will encourage demand and prompt exploration and production companies to slow their drilling and completion activity.
While the risks of today’s low-volatility stock market are clear, we continue to believe the next sell-off in the broader market will be a correction, not the beginning of a new bear market. Look for a rotation out of the growth-oriented fare and into cyclical and value groups.
Every earnings season, companies in the oil-field services industry highlight emerging technologies that can help upstream operators to improve their well productivity, boost operational efficiency and reduce per-barrel production costs. The current trends and new techniques are perhaps more important than ever given current prices.
Four months into the year and the global economy is in the midst of synchronized growth that should allow it to grow around 3.5 percent this year. China’s solid growth, India’s recovery after the monetarization jitters and the eurozone’s stronger-than-expected growth have been the catalysts for the strong showing this year.
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