The following is an excerpt from Amey Stone | March 13, 2017 | Barrons.com |
The price of crude fell some more on Monday, closing at $48.38. It’s now down about 10% from the $54 level it had held just a week ago.
Last week’s price drop was due to larger than expected inventory levels, a warning from a Saudi oil minister that the U.S is growing production too fast and a U.S. forecast for more domestic oil production growth, says Matt Sallee, portfolio manager at Tortoise Capital Advisors in a Monday podcast.
Indices tracking master limited partnerships (MLPs), the exploration & production sector and the S&P Energy Select Sector Index were down 3.2%, 4.2% and 2.9% respectively, he notes.
But he expects the market to rebound soon. He explained:
Global oil stocks as measured by OECD countries is already in decline and the U.S. we are nearing the end of refinery maintenance season and should soon get relief from the wave of imports as the OPEC cuts start to make their way through the market. Bottom line is we are not changing our call for under-supplied oil markets in 2017 and a steady rebound in the oil price as we move through the year.
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