US oil stocks look attractive after recent sell-off

Despite short-term uncertainty on the supply side, emerging markets are expected to drive strong demand for oil in the long-term.

Vikram Barhat 21 November, 2018 | 6:00PM
Facebook Twitter LinkedIn

Plummeting oil prices, including last week’s sharp drop in WTI crude prices, coupled with amplified volatility across global equity markets have put the US energy sector on course to be one of the worst performing sectors of the year, second only to minerals. The S&P 500 Energy Index is down 7% for the year to date, compared to nearly 3% gains for the S&P 500 index, according to S&P Dow Jones Indices.

Up until recently, oil prices were expected to continue to be under pressure given the ability and motivation of the Organization of the Petroleum Exporting Countries (OPEC) to ramp up production, causing a supply glut. However, if OPEC decides to cut production at its Dec 06 meeting, this could change.

While it’s unclear how things will shake out on the supply side, the recent OPEC World Oil Outlook report forecasts stronger long-term demand for oil, driven by emerging economies.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free
Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
BP PLC ADR25.73 USD1.96Rating
Chevron Corp97.98 USD3.30Rating
Exxon Mobil Corp55.49 USD3.44Rating
Royal Dutch Shell PLC ADR Class B40.93 USD1.11Rating

About Author

Vikram Barhat

Vikram Barhat  Vikram Barhat is a Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry. He also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.

© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies