Top Oil Picks as Prices Plunge
We suggest investors avoid betting on near-term oil prices and instead take a longer-term view.
Dave Meats: WTI crude prices plunged 8% yesterday, extending a route that has wiped off almost a third of the benchmark's value in about six weeks. For the first time since October 2017, front month futures closed in line with our $55 a barrel fair value estimate.
The decline reflects the realization that U.S. sanctions on Iran might not leave a big supply deficit going into 2019 after all, despite initial fears to the contrary. In fact, a handful of OPEC producers and Russia are now talking about the need for further supply cuts to prevent another glut. That's a complete reversal of sentiment in a fairly short period. How things evolve from here is still unclear, as there are several critical unknowns.
Dave Meats does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.