Last year, I wrote a somewhat bearish article on the long-term price of oil. While I am sticking to my guns long-term, a recent research piece published by Confluence Investment Management’s Bill O’Grady (one of the best energy analysts) sets a near-term bullish tone for the price of crude and natural gas. O’Grady suggests that oil prices remain steady thanks to “OPEC production discipline and solid global oil demand”. Based on his firm’s methodology, he suggests a fair value price of $72.49. Looking at a recent chart of the price action for West Texas Intermediate (WTI),… Read More
Last year, I wrote a somewhat bearish article on the long-term price of oil. While I am sticking to my guns long-term, a recent research piece published by Confluence Investment Management’s Bill O’Grady (one of the best energy analysts) sets a near-term bullish tone for the price of crude and natural gas. O’Grady suggests that oil prices remain steady thanks to “OPEC production discipline and solid global oil demand”. Based on his firm’s methodology, he suggests a fair value price of $72.49. Looking at a recent chart of the price action for West Texas Intermediate (WTI), I would have to agree. As the first quarter of 2018 ends, crude has traded in a 10-point range. If O’Grady’s forecast is accurate, it would suggest a near-term upside of 18% — not bad for an asset that will be range-bound for the near future. Natural gas may be going along for the ride as well. After a significant pullback, it looks as though the commodity has bottomed. So how do investors play this short-term trend? One of the best ways would be in the master limited partnership (MLP) space. I’ve identified three names in… Read More