Oil Energy Thread (oih)

[madrose1]

Remain positive on energy stocks in the long-term, but think the current market environment calls for more caution - Oppenheimer

Oppenheimer says although they remain positive on energy stocks in the long-term, they think the current market environment calls for more caution. Firm advises long-term investors to increase energy holdings on meaningful pullbacks, and active investors to buy on dips and sell in spikes. Firm notes energey stocks usually outperform the market during rising energy prices and lag during periods of declining prices. Rising energy costs tax the economy, slow corporate earnings growth, and usually spur inflation. The opposite is true for declining energy costs. Firm believes the current low P/E multiples on energy stocks could indicate peak earnings as investors believe oil and gas prices and refining margins have peaked. Firm expects the volatility in oil and gas prices and refining margins to continue as a result of the surge in electronic trading of energy products and excessive speculation by major financial institutions. Firm expects energy demand growth to continue, while politics of exporting countries may limit production growth. Firm expects industry consolidation to continue and possibly even accelerate, especially natural gas onshore N.A., before potential power shift in Washington starting with the mid-term elections.