Oil Price Outlook: Stage Still Set for Long-Term Recovery, but Near-Term Risk Elevated

The downward pressure on oil prices has continued unabated in the past few weeks, raising the same critical issues for investors trying to find value and understand downside risks amid the current industry crisis. We remain convinced that a handful of compelling opportunities exist for long-term investors. However, we continue to caution that tremendous uncertainty exists as to how oil prices will trend until industry fundamentals improve, which is likely to be a drawn-out process that doesn't begin until the second half of 2016. Accordingly, investors should be discriminating in their stock-picking and prepared to weather additional volatility.