Morning Report Tuesday 4 August 2015
Both Brent and Crude Oil fell to 5-month lows last night, as markets remain very concerned over increasing supply, with Iran about to turn on the taps. In the US the main energy stocks are now down over 30% from their highs of June 2014 and the sector is actually becoming a dividend play ranking 3rd in the top 10 sectors (assuming earnings can be maintained). Australian energy stocks have also been battered, not surprisingly, even though they benefit from the falling $A with Oil Search (OSH) -26.5%, Santos (STO) -52% and Woodside Petroleum (WPL) -20%, in the comparable period. The obvious question is, are we near a buy point, or should we run away from the energy sector?
• In the US 85% of the time oil stocks bottom before the under commodity by an average of 26 days –Bloomberg.
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