The Big Turn: Oil’s New Supercycle
Five years ago, OPEC, led by Saudi Arabia, shocked global markets by pursuing a pump-at-will strategy that saw prices collapse from over $100/bbl in the summer of 2014 to under $30/bbl by early 2016. Not surprisingly, energy has been the worst-performing sector in the S&P 500 over the past 6 years, falling close to 19% since the end of 2013 despite a 94% rally in the S&P 500 over the same time period. Today, energy stocks have just a 4.3% weight in the S&P 500 compared to around 11% in the summer of 2014 and over 16% of the index back in the summer of 2008 as crude rallied to around $150/bbl. Energy’s share of the S&P is close to the lowest in history, even less than it was back in 1998 when crude sold for less than $20/bbl. And institutional investors have shunned the group – among active fund managers, it’s the most underweight sector in the S&P 500. However, just as the crowd missed the big top in oil and energy stocks in 2014, they’re missing the powerful change in the cycle quietly underway right now that will bring a major upside re-rating for the group starting in 2020. In this presentation, Elliott Gue, the energy expert who forecasted the big collapse in oil prices back in 2014 and warned readers to avoid erstwhile popular high-flyers like since-bankrupted deepwater driller Seadrill, explains the two key shifts in the globaloil market that are driving a powerful shift in the cycle. To put the upside potential into perspective, in the first 5 years of the last energy supercycle starting in 2002 the S&P 500 Energy Index returned 264.9%, besting the S&P 500’s 82.9% return over the same time period by a whopping 182 percentage points. Elliott will also outline his game plan for taking advantage of the new bull market in crude including 5 specific “early cycle” energy recommendations that will be among the first to benefit from the big turn now underway. And, just as important, not all energy stocks will benefit from the big shifts underway right now. In fact, many will remain extremely dangerous investments even as the sector heals – watch this presentation to learn where the pitfalls are in the group along with some specific stocks and energy sub-sectors to avoid.