Sweet 16 Update - October 3
Posted: Fri Oct 02, 2015 6:00 pm
I have updated the Sweet 16 spreadsheet and posted it to the EPG website. You will find it on the home page. You can view it on the website or download it to Excel.
The Sweet 16 had a good week. In fact, seven of the companies are now up year-to-date. As a group the Sweet 16 is down 10.6%. Considering it was down more than 20% a couple weeks ago, we are making progress.
Parsley Energy (PE) and Southwestern Energy (SWN) "officially" joined the Sweet 16 after the markets closed on 9/30/2015. They replace Bonanza Creek (BCEI) and Baytex Energy (BTE). BCEI was moved back to the Small-Cap Growth Portfolio for now.
I am going to be tied up all weekend working on a Special Report for OilPrice.com. This report will highlight Laredo Petroleum. The report will be sent their "Special Situations" subscribers late next week. This new "gig" takes up a lot of my time, but it does compensate me for taking a very hard look at some of our model portfolio companies. So far, we have sent them reports on GST, NFX and SM.
The energy sector is drawing more attention because there are now clear signs that global oil supply & demand are tightening.
> EIA reported on Wednesday that U.S. crude oil production has fallen 600,000 barrels per day since April.
> Bloomberg reported that OPEC production dropped an estimated 233,000 barrels per day from August to September
> A bid drop in the active rig count was reported by Baker Hughes on Friday, resulting in the energy sector rally you saw on Friday
As I have posted here many time, the rate of production decline is going to accelerate in the 4th quarter. In addition to the active rig count falling, half of the wells being drilled are not be completed. U.S. production will fall from 9.7 million barrels per day in April to under 8.5 million barrels per day in March, 2016.
Production is falling all over the world. The next IEA "Oil Market Report" (expected October 12) should contain some very bullish forecasts.
I told someone today, "If you are waiting for Goldman Sachs to admit they were wrong about oil prices going to $20/bbl, you are going to miss a big chunk of the rebound." As you saw on Friday, there is a lot of money sitting on the sidelines waiting to get into this oversold energy sector. Market timing is tricky business.
The next edition of The View From Houston will be a few days late. I hope to publish it on Wednesday of next week.
DALLAS members: I will be opening the luncheon presentation at the Doubletree Hotel on Friday, October 9 with an oil & gas market update. Please register and bring a friend. We have a very good speaker following me.
The Sweet 16 had a good week. In fact, seven of the companies are now up year-to-date. As a group the Sweet 16 is down 10.6%. Considering it was down more than 20% a couple weeks ago, we are making progress.
Parsley Energy (PE) and Southwestern Energy (SWN) "officially" joined the Sweet 16 after the markets closed on 9/30/2015. They replace Bonanza Creek (BCEI) and Baytex Energy (BTE). BCEI was moved back to the Small-Cap Growth Portfolio for now.
I am going to be tied up all weekend working on a Special Report for OilPrice.com. This report will highlight Laredo Petroleum. The report will be sent their "Special Situations" subscribers late next week. This new "gig" takes up a lot of my time, but it does compensate me for taking a very hard look at some of our model portfolio companies. So far, we have sent them reports on GST, NFX and SM.
The energy sector is drawing more attention because there are now clear signs that global oil supply & demand are tightening.
> EIA reported on Wednesday that U.S. crude oil production has fallen 600,000 barrels per day since April.
> Bloomberg reported that OPEC production dropped an estimated 233,000 barrels per day from August to September
> A bid drop in the active rig count was reported by Baker Hughes on Friday, resulting in the energy sector rally you saw on Friday
As I have posted here many time, the rate of production decline is going to accelerate in the 4th quarter. In addition to the active rig count falling, half of the wells being drilled are not be completed. U.S. production will fall from 9.7 million barrels per day in April to under 8.5 million barrels per day in March, 2016.
Production is falling all over the world. The next IEA "Oil Market Report" (expected October 12) should contain some very bullish forecasts.
I told someone today, "If you are waiting for Goldman Sachs to admit they were wrong about oil prices going to $20/bbl, you are going to miss a big chunk of the rebound." As you saw on Friday, there is a lot of money sitting on the sidelines waiting to get into this oversold energy sector. Market timing is tricky business.
The next edition of The View From Houston will be a few days late. I hope to publish it on Wednesday of next week.
DALLAS members: I will be opening the luncheon presentation at the Doubletree Hotel on Friday, October 9 with an oil & gas market update. Please register and bring a friend. We have a very good speaker following me.