Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

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

 

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.