Despite crude price surge, oil stocks still a bargain |
| Globe and Mail - May 28, 2008 |
On a day when oil took a holiday, National Bank Financial reminded us that there's still some very profitable work to be done.
Crude retreated $3.34 (U.S.) to $128.85 a barrel yesterday, amid general nervousness that prices had been pushed too far given the anemic state of the U.S. economy. Energy stocks followed suit; the S&P/TSX energy subindex fell 3 per cent, led by recent high-flier Talisman Energy Inc., which shed a whopping 7 per cent. It was a profit-taking feeding frenzy: More than two-thirds of the energy group's 58 stocks fell more than 2 per cent.
But before anyone goes writing off the energy sector as overpriced, overhyped and overplayed, take a look at the little report issued by NBF yesterday. The firm's commodity analysts jacked up their oil price forecast by 33 per cent for 2008, to an average of $120 a barrel from $90, and raised their 2009 forecast to $110 from $80. They also increased their natural gas price forecasts by 20 per cent over the next two years, and raised long-term (beyond 2011) assumptions for both oil and gas by nearly 25 per cent.
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- Posted: 2008-05-28 08:43:24
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