ENERGY SECTOR OUT-PERFORMANCE LIES AHEAD
Having ended 2017 as one of the worst performing global sectors, sustained out-performance lies ahead for energy stocks in 2018. The underlying crude oil market is now under-supplied while inventory levels have fallen sharply. These supply-demand and inventory dynamics have historically translated into improving corporate profitability over the coming 12-24 months.
- The current supply-demand and inventory dynamics look like 1996-1997 and 2010-2014 periods where crude oil rose 53-99%
- The 60% rise in crude from the summer, 2017 lows should see corporate returns rise by 400-600 bps
- The normalization of corporate returns in the energy sector is the key to reversing the all-time low valuations of the energy sector versus global equities
Source: UBP, Bloomberg Finance, IAEA, U.S. Dept. of Energy
Redmount Capital Partners, LLC (Redmount) provides financial guidance and makes recommendations based on the specific needs and circumstances of each client. Investing involves risk and clients should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. The information contained in this blog is intended for information only, is not a recommendation, and should not be considered investment advice. Please contact your financial adviser with questions about your specific needs and circumstances. This blog is a sponsored blog created or supported by Redmount and its employees, organization or group of organizations. This blog does not accept any form of advertising, sponsorship, or paid insertions. Certain authors of our blog posts may be influenced by their background, occupation, religion, political affiliation or experience. It is important to note that the views and opinions expressed on this blog are that of the owner, and not necessarily Redmount. As a Registered Investment Adviser, Redmount does not allow any testimonials on their blog, and any comments deemed as such Redmount will remove.
Redmount does not offer tax or legal advice; therefore all articles should not be taken as such. Please consult legal or tax professionals for specific information regarding your individual situation. All referenced entities in this site are separate and unrelated to Redmount. Any references to any specific commercial product, process, or service, or the use of any trade, firm or corporation name is for the information and convenience of the public, and does not constitute endorsement, recommendation, or favoring by Redmount.