Oil to stay lower for longer

Alphinity Investment Management

Alphinity Investment Management

My trip to the US in November was to better understand the economics of the various shale oil basins and the strategies being pursued by oil producers, to assess whether the oil price recovery assumed by the market is realistic or overly optimistic. I was of the view that the current $40/barrel oil price is unsustainably low and that a price closer to $70 would be required to stimulate the medium-term 0.5-1.0mbpd growth in US oil production that is required based on our demand and supply assumption. However from an investment perspective, the pace of the recovery is a more important element in timing our exposure to the sector. I came back with a view that the oil price is more likely to remain in the $40-50/barrel range in 2016 than to move above $50, and that therefore earnings of oil-producing companies will continue to disappoint. Follow the link to read the full wrap-up of my trip. (VIEW LINK)

1 topic

Alphinity Investment Management
Alphinity Investment Management

Alphinity Investment Management is an active, boutique, equity manager based in Sydney and majority owned by its staff. Established in 2010, Alphinity has dedicated experienced teams managing both Australian and global equity funds.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.


Sign In or Join Free to comment