The price of oil is finally back above $50 and Dan Steffens, President of the Energy Prospectus Group, believes the remainder of the year will be quite bullish for the energy sector.
Market Direction Is Up
With demand projected to continue growing this year into next, inventories tightening and continuing to fall, and rig counts decreasing, we can expect oil prices to go up into year-end, said Steffens.
It’s interesting to note that in the first quarter, S&P 500 profits largely came from the energy sector. Yet, energy stocks have been decimated since then.
Steffens follows about 50 publicly traded companies, and almost all are down year-to-date even though they’re having a better year financially.
There's “this fear that there’s going to be a big collapse in oil and gas prices,” he said. “I don’t see it happening. I don’t see any way sub-$50 oil can be maintained and meet future demand for refined products.”
While Steffens doesn’t think we’re going to see $100 anytime soon, he believes we will hit around $65 oil in 3 or 4 months.
Energy Stocks Unloved
Also Consider: Dan Steffens: Energy Sector Massively Undervalued (Podcast)