The big story for energy markets in the first half of 2017 will be a stronger-than-expected surge in US shale oil production that keeps the lid on global oil prices. To take advantage, we’re adding a midstream processing and pipeline company to the portfolio.
The energy industry’s growing consumption of fresh water for hydraulic fracturing and approaches to disposing the resulting wastewater have created significant challenges. We highlight some of the solutions.
US oil production appears to be bottoming, but investors seeking to profit in an environment where prices will likely range between $40 and $60 per barrel must pay attention to basin-specific trends as well as companies' balance sheets and acreage quality.
Activity levels and pricing for oil-field services and equipment will likely remain under pressure in the US onshore market this year, with early 2017 bringing a bit of a recovery on both scores. But a return to the levels witnessed during the boom years appears unlikely, especially if Saudi Arabia opts to tap some of its spare capacity to take market share and keep oil prices in check.
A few bad apples don’t spoil the bunch. Some midstream names will find themselves under pressure from declining oil output in the US onshore market, as the effects of energy producers’ reduced drilling activity start to manifest themselves. But indiscriminate selling creates opportunities for discriminating buyers.
Sensationalist predictions about oil prices have become all the rage over the past two months, but they won't necessarily help investors make money. We explain our outlook for crude-oil prices and why a buying opportunity may be around the corner.
However, the universe of energy stocks that meet our buying criteria is relatively small; don’t misconstrue this call as open season to buy energy stocks. Not every company has the potential to outperform, let alone survive.
Master limited partnerships still offer above-average yields, but investors looking for safety and superior total returns in an uncertain business environment should focus on blue chips and names with supportive general partners that can drive distribution growth by dropping down assets.
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