Firm Crude Prices May Boost Energy Trusts
Firm oil prices should provide the catalyst to kick-start the next upleg in energy stocks.
Oil and Natural gas prices have remained remarkably firm over the past few weeks despite declining growth expectations and increased market volatility. Recent price action suggests that, after dropping 35% from its July 2006 high, oil prices may have completed their corrective phase.
While a slowing U.S. economy remains a risk, strong Chinese demand should help maintain the floor under crude prices.
If so, investor confidence in this commodity should begin to restore as global growth concerns ease, providing the catalyst to trigger another rally in energy plays.
After consolidating for almost a year, the energy sector does not exhibit the overbought properties of most other markets. Bottom line I am going to start loading up on energy trusts.
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