The Energy Report: What's your macro overview on the energy sector and which companies do you like in that sector? Scott Koyich: On a macro basis, we are in a very tough time in the world today. It's now more important than ever to protect capital and to focus your investment choices. In the energy sector, oil has corrected dramatically in the past weeks. That's due to both nervousness around storage numbers and global consumer and industrial demand. This has left a worldwide bearish feeling surrounding the commodity. It's my opinion the OPEC countries need to balance their budgets on an $85/barrel oil price and I think we will see it hover around there going forward.
Natural gas prices have been in the dog house for quite some time in North America due to lack of industrial demand and the perceived abundance of supply from the unconventional discoveries in the U.S. and growing supplies of liquefied natural gas (LNG) worldwide.
The cycles normalize, eventually, and will turn in a positive direction; therefore, if you pick companies with strong management, balance sheets, asset bases and discount-to-enterprise value, your portfolio should do well on the turnaround. (more)
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