Energy Stocks

If I may interject,....... now is a bad time to try and get into the energy space.   You are late and the move has already been made and OPEC has made their "point".  There is no problem waiting for a better entry point.  Don't forget this..

FWIW,   Energy makes up 30% of my portfolio before all of this.  I am a long term believer in this space, but the recent moves of the last week are all based on countries holding firm to the agreement.

For example, no one know if Russia or Iran will agree to the production cuts.  Personally, I think the deal is a farce, and don't believe these countries will stick , because they are in a world of hurt.    As a result , they really need to keep pumping, and think they are playing the 'Saudis.

The Saudis (who the pull the strings behind OPEC), have the wherewithal to survive some down years.

Long story short, ... I don't believe the Iranians and/or Russians.. Besides, even if they hold to the agreement, American producers have the ability to pick-up the slack that OPEC is hoping to cut from world market productions.

So, I am looking to trim some of my positions soon if the market believes that $55 is a fair price for a barrel of crude.   This is at the upper extreme of my price expectations FWIW.

Wall, I believe we may be around the same age (mid 40's ? )  , dividends are a crucial part to the returns of the S&P 500.   Don't discount the success of these dividend payers.     They are viewed by many as stogy enterprises, but they play an important part role in the "growth" of one's portfolio, too..

Doesn't anyone have any interest in Energy stocks ?

Since the beginning of the year, OPEC has extended its production cuts, and it still hasn't been enough to keep from the slide in oil.  The world is awash in oil, and due to U.S.  pumping close to 10M barrels a days, a record in recent decades.   

Oil stocks are down about 20% this year, while the S&P is up about 8.5%.   Now is the time, folks, to start doing some buying in the energy complex. 

The downside risk is more minimal than the upside potential, IMO...

I'm thinking big, like the major oil integrators (BP, Chevron).   As you pointed out, Wall, the little players are highly leveraged , and need the capital infusion from Wallstreet to keep on pumpin'.  I can't see this going on endlessly as the wildcatters continue to lose money on every barrel they pump.

In addition OPEC is planning to tighten the screws (IMO) on its member states,  Libya & Nigeria.   They were not part of the production cuts ;

https://www.reuters.com/article/us-opec-oil-idUSKBN19L20X

In summary, I think the current price of oil is not sustainable long-term, and represents a good buying opportunity.  I plan to add to my positions this week.