Financial Services: Bank Worries Are Overdone
Investors are overly concerned about the potential impact of falling oil prices and turmoil in Russia on the banks that we cover.
Morningstar's view is that the decline in oil prices is likely to prove a short-term phenomenon. With U.S. producers drastically reducing spending in 2015, production growth is set to meaningfully slow this year and could even decline in 2016 if prices remain weak. Our longer-term expectation of continued global demand growth leads us to believe that Brent oil prices will again be around $75 per barrel by 2018. It's our view that this is the minimum price necessary to ensure adequate supply over the medium to long term.
Erin Davis does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.