Rather than benefit from falling interest rates, utility stocks are still being shunned by the giant institutions that dominate stock market trading because of fears of a “Big W” recession in the US.
Although my bullish thesis on one of my more aggressive recommendations remains intact, we were stopped out of the position on Friday. Here’s a strategy update.
When it comes to energy, it’s hard to find two countries whose interests are more conjoined than the US and China.
In the first nine months of 2009, Chinese imports of thermal and coking coal rose 167 percent and 400 percent, respectively. And India will rely heavily on coal imports to feed its rising domestic consumption of electricity.
One hundred projects across 49 states will receive USD3.4 billion in federal stimulus funds over the next several months for the purpose of building a “smart” power grid. The money is slated to be disbursed in 60 days and will augment USD4.7 billion already being spent by utilities with the cooperation of state regulators.
As I remain bullish on oil’s long-term prospects, this week’s installment of Emerging Market Speculator features energy expert Elliott H. Gue’s take on key developments in the global oil market. Mr. Gue is the editor of The Energy Strategist and MLP Profits.
In this issue I examine the prospects for my oil-levered recommendations in light of recent news and corporate earnings releases. The next installment of The Energy Strategist will examine the coal markets and provide in-depth analysis of related Portfolio holdings.
At this point, oil sands production of 3.2 million barrels a day by 2020 seems more inevitable than a United Nations-brokered agreement on climate change.
The need to drill increasingly complex and expensive wells in the Deepwater Golden Triangle means that producers will be pouring hundreds of billions of dollars into these three key regions over the next few years.
The current pullback and any additional downside to come over the next few weeks should be regarded as a gift, a second chance to buy into recommended stocks at attractive levels. As I note in today’s issue, the fundamentals for energy markets remain strong; I now expect crude to top its 2008 highs by sometime in 2011.
