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Quarter-End Insights

Our Outlook for Energy Stocks

Macro concerns could pressure near-term outlooks--creating excellent buying opportunities for energy investors.

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  • Demand concerns sent oil prices down roughly 20% this quarter, and the prospect for continued supply gains from unconventional oil may weigh on pricing until demand reasserts itself.
  • Gas demand for power generation is running 30% higher than last year, in part due to cheap gas prices. If we get a particularly hot summer, power generation demand could make a sizable dent in the current storage glut, and reduce the odds of shut-in gas this fall.
  • With low crude oil prices and booming production in "liquids-rich" resource plays, the next glut coming to the energy patch is hitting natural gas liquids.

     

    Jason Stevens does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.