The Energy Report: In your last interview, you talked about raising price targets on energy sectors and individual stocks with promising reserves and production growth. Is that still your view, or have circumstances changed?
Andrew Coleman: What we're more worried about at this point is that the U.S. economy has been slower to recover than we expected. Meanwhile, the situation in Europe is getting worse and China's growth is slowing. To help us evaluate oil and gas markets in this context, our team here at Raymond James put together a bottom-up supply model looking at the oil shales, which was a follow-up to work the team had done on gas shales a couple of years earlier.
"The forward curve on gas is getting better."
The gas outlook has remained cautious, although not nearly as bearish as it was a couple of years ago. We have, however, become much more nervous on the short-term outlook for oil. We have a $65 per barrel (bbl) forecast for West Texas Intermediate (WTI) and an $80/bbl forecast for Brent for 2013. The forward curve on gas is getting better, and certainly 2013 gas is over $4 per thousand cubic feet (mcf) right now. Oil is our big concern and back in June we downgraded virtually every name that we follow in the EP space to the point where we now have no strong buys in our coverage group. Continue reading "Natural Gas Has Sex Appeal: Andrew Coleman" →
