Don't Give Up on Energy Stocks
Value hunters, who buy what other investors shun, are facing a tough decision these days. Although the rest of the market has been surging, energy stocks have collapsed. Is oil over? Or is this an incredible buying opportunity, like technology shares in 2002 or practically anything in 2009?
I'm an opportunist. But the extent of the carnage in the energy sector is important to understand. Most energy stocks are tied to the price of petroleum. In June 2014, West Texas Intermediate, the North American crude oil benchmark, was $107 a barrel. At the end of 2019, it was just $51 and change. Natural gas dropped over the same period, from $4.79 per thousand cubic feet to $1.84.
That is the main reason McDermott International, the venerable provider of oil and gas construction services
