Beginning in December of last year, following the announcement by OPEC of a cut in oil production, I have discussed the “headwinds” that persist against a sustained rise in oil prices.
“The supply/demand dynamics currently suggest that oil prices and energy-related investments could find a long-term bottom within the next year or so following the next recession. However, it does not mean those investments will repeat the run witnessed prior to 2008 or 2014. Such is the hope of many investors currently as their ‘recency bias’ tends to overshadow the potential of the underlying fundamental dynamics.”
After exiting the energy space in April 2014, there have been small tradeable opportunities within the energy sector but the trend remains sorely negative. The recent pounding of both oil prices, and the energy-related sector, continues to support the repeated warnings to remain clear of the space for now.
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