Oil Price Down, Guidance Up
Updated guidance from this top idea company pulls forward development on a key growth asset and helps mitigate one of the biggest risks.
WTI oil is down to $75, as Trump signed the MOU with Iran and posts repeatedly about lowering oil prices, and as tankers start to exit the Strait of Hormuz. I continue to think that Trump’s interventions in the oil market will backfire over time. They remind me of Nixon’s interventions, which led to a period of volatile but mostly much higher oil prices, under similar US oilfield maturation conditions. I wrote about this in January: bisoninsights.info/p/trump-calls-for-50-oil-after-venezuela
It’s worth noting that the conditions for a final deal announcement described in this article from late May have been met. This Trump / Iran deal is going forward (for now) and should be taken with seriousness - they say to take Trump seriously but not literally.
While oil prices have fallen this week, I don’t think the right-tail risk of higher oil prices from supply disruption is totally off the table yet, considering the large inventory draws and fragility around the “deal” that has reopened the Strait.
Against that backdrop, I recently published an in-depth update on one of my largest oil producer holdings. That company just released updated, improved guidance that warrants a brief update. I highlighted this company along with other oil stocks I have large positions in because I think it can do well in a lower price environment, and has substantial upside in a higher oil price environment:
This company is one of a set of ideas that I believe present me with the best combination of downside protection and upside potential, no matter the oil price environment. They represent a large portion of the Bison Insights composite tracker, which has been meaningfully outperforming oil stock ETFs like XOP and the broader market ETFs like SPY:
Disclaimer: This is for informational and educational purposes only. This is not an offer, solicitation, or investment recommendation. Please consult an advisor and do your own diligence. Past performance is not indicative of future results.
