Energy investors remain bullish... G & M excerpt "The disconnect between oil and oil stocks reflects two big, contrasting bets facing commodities and the economy.
Oil prices, like other commodities, are being hammered by fears that rising interest rates are causing a slowdown in global economic growth, which would further crimp demand for fuel.
On the other hand, energy investors see value in oil and gas stocks. It helps that energy stocks are relatively cheap based on their forward price-to-earnings ratio, and companies are pumping out dividends to shareholders.
But more than that, investors believe tight supplies will more than make up for weaker demand and send oil prices soaring again. For instance, U.S. oil inventories are at their lowest level since 2000, after accounting for drawdowns from America’s strategic petroleum reserve to fight high gasoline prices.
Energy stocks tend to track oil prices over the long run, leaving the question of which of those bets will be proved right."