Austin Skyline

Raymond James Energy Stat of the Week
by J. Marshall Adkins

Energy Stat: Mile High Oil Patch Optimism at EnerCom 2016
August 22, 2016

EnerCom's well attended oil and gas conference in Denver left us incrementally positive on the outlook for the E&P space entering 2017 and beyond. The sentiment continues to be that oil supply/demand fundamentals are correcting and it is just a matter of time before oil prices move significantly higher. While concerns regarding the Colorado ballot initiatives certainly place an overhang on Colorado based operators, the future of the industry as a whole looks increasingly bright. Rising productivity and improving capital efficiency coupled with an A&D market buzzing with activity is a sure-tell sign of operator optimism regained. In sum, while near-term volatility in oil prices remains unavoidable, we have little doubt that the E&P rally is underway and that the zenith for E&P stock prices remains high.

This is a summary of a much more detailed commentary. Please contact your financial advisor for the full report.

There is no assurance any of the trends mentioned will continue in the future. Past performance is not indicative of future results. Investing involves risk and investors may incur a profit or a loss. Specific sector investing can be subject to different and greater risks than more diversified investments. Investing in commodities is generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only form a small part of a diversified portfolio. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The S&P 500 is an unmanaged index of 500 widely held stocks. The Oil Services Index (OSX) comprises 15 of the largest oil service companies. The S&P SuperComposite Oil and Gas Exploration & Production Index (S&P Oil and Gas E&P) consists of all oil and gas exploration and production stocks included in the S&P SuperComposite 1500 Index. Investors cannot invest directly in an index. Additional information is available upon request.