Oil Price Might Reach $150 with Economic Growth: Jonathan Waghorn

In the past couple of days, amid the crisis in Iraq, the oil prices have been going up. Recently, the Brent price reached a new 52-week high, and on Monday it has edged up by around 0.4% so far to approximately $112.90. At the same time, many investors and analysts became concerned over the situation in Iraq, even though the south of the country is currently not affected by the insurgency in Iraq, and the country is still able to produce and export crude oil.

Offshore Oil Drilling BP RIG

In a recent interview with CNBC, Jonathan Waghorn of Guinness Asset Management, provided his insights about the oil price, stating that the oil price could go as far as to the $150 mark, being impacted by the growth of the world economy.

“As the world economy continues to grow, let’s say 3% real growth to the end of the decade, we would expect oil prices to inflate alongside. Simple math really takes you to $150 at the end of the decade,” Waghorn stated.

Waghorn also stated that Guinness Asset Management, which returned almost 40% last year, is still fond of energy, stating that it is “an early trade” for the firm in terms of the current macroeconomic environment. In this way, Waghorn said that Guinness runs a long-only energy fund, which consists 100% of equities.

“At the minute we’ve got a balance, we hold all of the majors. We think they are very, very cheap on price earnings, on price to cash flow, on some of the past basis. We still own some U.S. refining, we own a lot of North American unconventional E&P exposure. Recently, we‘ve been adding more European names into the portfolio,” Waghorn added.

Among the top holdings of Guiness Asset Management are companies like Total SA (ADR) (NYSE:TOT), Canadian Natural Resource Ltd (USA) (NYSE:CNQ), and Unit Corporation (NYSE:UNT), however, Guiness has an equally weighted portfolio. Waghorn highlighted another top holding, Newfield Exploration Co. (NYSE:NFX) as a company that “has got a fantastic amount of running room.”

“I think new plays the stack and the scoop, and resources there are growing pretty substantially. And that’s still a very unloved name. It’s less than six times cash flow,” Waghorn said about Newfield Exploration.

Disclosure: none

 

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!