5 Sell-Ranked Energy Stocks With Declining Estimates To Avoid
Zacks Investment Research | Sep 14, 2017 09:38PM ET
Despite President Trump’s pro oil policies and OPEC’s efforts to rejuvenate the oil industry, the energy sector’s bumpy ride continues. Though oil prices have recovered from their historical lows, prices still remain low. Commodity’s woes continue as prices linger around $50 per barrel.
While OPEC and other major producers’ have been taking efforts to help crude prices improve, increase in North American shale output continues to be a laggard. OPEC's efforts to trim output and achieve a balance in demand and supply have stabilized the market to a large extent. However, in the process it has also enabled shale drillers to reap greater produce.
With production remaining strong and commodity demand lagging supply, the oil industry’s prospects are dependent on the conflicts arising from OPEC-driven output cuts and increased U.S. shale production. Per Energy Information Administration’s (EIA) latest inventory release, U.S. production rose to 9.5 million barrels a day — the highest in the last two years. This was prior to the drop in U.S. Gulf of Mexico oil volumes due to Hurricane Harvey.
Harvey led to the shutdown of various refineries. This led to the refinery utilization falling to the lowest levels since 2010. It has also reduced the demand for crude which translated into low oil prices. However, with refineries gearing up to resume operations, oil prices are expected to move up gradually.
Nevertheless, volatility of commodity prices along with the rising shale production are likely to delay the recovery process of the market. Oil/Energy ranks 15 among the 16 broad Zacks sectors within the Zacks Industry classification. Year to date, the Zacks Investment Research
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