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Strategies & Market Trends : Dino's Bar & Grill
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To: Goose94 who wrote (66770)8/30/2019 7:49:25 PM
From: Goose94Read Replies (1) of 202372
 
Crude Oil: Eric Nuttall The energy market is broken. Crude oil has appreciated by 24 per cent year-to-date and yet many mid-cap energy stocks are down 20 to 40 per cent, demonstrating that there’s a complete buyer strike. Many companies are generating the largest amount of free cash flow in their corporate histories, yet their stocks are making all-time lows. How did we get to this point? Sector performance has been too poor for too long, exhausting investors’ patience; U.S. oil shale supply growth has perverted the market into believing that there are decades of “low-cost” supply available and the Twitter-fueled U.S.-China trade war is dampening sentiment concerning the outlook for global growth.

What needs to happen for sentiment to change and for energy stocks to rerate? U.S. supply growth rates must fall below demand growth rates (happening in real-time), sentiment about the global economy needs to improve (oil demand growth rates have recently inflected in July back to a 1.3 million barrels a day year-over-year) and Canadian exploration and production companies (E&Ps) must collectively use their 10 to 40 per cent free cash flow yields and become the buyers of their own stock, demonstrating the robustness of their existing business models and also hopefully shaking investors from their apathetic comas.

BNN.ca Market Call Friday Sept 30th @ 1200ET
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