Our Outlook for Energy Stocks
Energy firms take full advantage of market-driven opportunities in the second quarter.
The energy industry caught a breather this quarter as one of the biggest short-term rallies in oil prices took hold. Although spot natural gas prices remained very weak, expectations for higher prices in 2010 gripped the market and further supported a rally in oil and gas producers' stocks. Equity and debt markets thawed as well, after a couple very weak quarters. Across the spectrum (upstream, midstream, and downstream), energy companies did not let this market-driven opportunity go untapped. Energy firms issued heaps of equity and debt, and merger and acquisition activity picked up. These deals contributed to some of the more debt-ridden and cash-starved firms undergoing significant healing, especially compared with where they stood a quarter ago.
Eric Chenoweth has a position in the following securities mentioned above: SE, RRC. Find out about Morningstar’s editorial policies.
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