Highlights Portfolio Strategy Recession odds continue to tick higher, according to the NY Fed’s probability of recession model, at a time when global growth is waning, U.S. profit growth is contracting and the non-financial ex-…
Overweight The S&P oil & gas exploration & production (E&P) index received a much needed boost last week when the blockbuster acquisition of Anadarko by Chevron (at a 37% premium to the stock’s previous…
Our Commodity & Energy Strategy team’s 2019 and 2020 Brent price forecasts remain at $75 and $80/bbl. Delays in building out U.S. Gulf deepwater-harbor capacity next year will keep exports constrained. This will back…
Increasing volumes of WTI light-sweet crude are making their way into the Brent North Sea physical market. These export volumes will increase, supported by the buildout of pipeline takeaway and deep-water harbor capacity in the U…
Overweight For the better part of this decade, the rise and fall of WTI has been the fundamental driver of the fortunes of the S&P oil & gas exploration & production (E&P) index, as it should be. However,…
Highlights Portfolio Strategy Looming inflation, the synchronized global capex upcycle and rising real Treasury yields all argue for preferring oil-related to gold-exposed equities. Recent Changes Initiate a long S&P oil…
Overweight The divergence between rising crude oil prices and the performance of exploration & production (E&P) stocks has grown remarkably wide (top panel). We continue to credit the absence of market belief in the…
Overweight Disbelief in the longevity of the increase in oil prices is the likely culprit weighing on exploration & production (E&P) stocks along with a bottleneck-induced steep shale oil price discount to WTI. Nevertheless,…