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Quarter-End Insights

Our Top Picks in the Energy Patch

Plus, our take on the prospects for Canadian energy, where insufficient pipeline capacity is limiting access to export markets.

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  • Energy stocks are modestly undervalued currently, thanks to the recent slide in oil prices in the United States and abroad on expectations of weaker global demand and robust North American supply growth.
  • Drilling efficiencies continue to accrue to U.S. E&Ps, where oil and gas production growth remains strong despite moderating prices recently.
  • Despite softening demand, surging production, and weakening prices, we continue to see long-term benchmark oil prices around $90 per barrel for WTI and $100 per barrel for Brent, and we still expect long-term gas prices in the United States to strengthen above $5/mcf.
  • This quarter, we examine prospects for Canadian energy, where insufficient pipeline capacity limits access to export markets.

 

David McColl does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.