Don't look now, but we are seeing some decent signs of a recovery in the Energy sector and commodities more generally. Crude prices jumped today on news of a diminishing US stockpile. Of course, given the fact that last week saw news that the glut of crude within the US was at its highest level in 80 years, a decline in inventories was fairly likely. Still, we got a @5% pop in May futures today.
Despite the Northeast's reversion to colder weather over the past few days, demand has increased for crude as the Summer driving season approaches. Refiners are working feverishly to make the gas that will fuel everyone's Summer vacation/travel driving. That demand increase has impacted the stockpiles.
The question is, can this rally be sustained? Prices are definitely higher than they were just two months ago– when analysts last called a bottom in the crude market. At that time a barrel was @$30. We still need to see some more sustained growth globally in order to say the worst has past for Oil stocks. Also, we could see a boost in prices if producers in consortiums like OPEC really follow through on their efforts to limit production.
Obviously, if you are looking to buy low, oil is up, but currently still near its multi-year lows. So, if you're looking for cheap energy/oil stocks, time may be running out. It all depends on how producers manage production and how fast global growth–especially in China–can bounce back. And, as always, some firms are situated better within the sector. Consider refiners, they are running at almost max capacity, so there is one area where we know business is quite strong.
For today's bulletin we used our website's advanced screening functions to query our systems for the various oil-related industries in the Energy Sector. We find the following data for top-five lists of various categories.
Top-Five Oil and Gas Industry Stocks–Short-Term Forecast Returns
Ticker
Name
Mkt Price
Valuation (%)
VE Rating
Last 12-M Return (%)
BAK
BRASKEM SA
12.5
-35.69%
5
61.08%
VLO
VALERO ENERGY
63.14
-8.78%
5
6.06%
PSX
PHILLIPS 66
84.81
14.32%
5
7.97%
PBF
PBF ENERGY INC
32.53
-2.36%
4
1.59%
TSO
TESORO CORP
82.71
-7.76%
4
-4.55%
