While many sectors have seen decent gains year to date, falling oil stocks have shaved off some of the market’s results. Oil stocks continued to fall this week, despite almost perfect compliance from OPEC on production cuts, a record decrease in spending by oil & gas companies, and an increased demand for the commodity. OPEC members have a $60/barrel target, and Citigroup stated two days ago that it sees prices in the mid $60s by the end of the year.
Year to date, the sector has struggled as the market continues to ignore many of the fundamentals but those with patience will be rewarded. As I mentioned in previous writings, when energy stocks move they tend to move fast. A recovery of 20%-30% in a 2-3 week period for mid cap names would not come as a surprise. As we come out of perhaps the sector’s worst glut in history, reduced production and increase in demand keeps us bullish.
Have a great weekend!
Daniel Popescu CFP, CIM, FMA, FCSI
President & CEO
MNP Tower, 3100-1021 West Hastings St.
Vancouver, BC V6E 0C3
T: 604-558-6830/1(877) 588-6822
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