That’s the verdict from Oppenheimer’s Fadel Gheit and Luis Amadeo, who look back at the performance of large major oil companies like Chesapeake Energy (CHK) and Southwestern Energy (SWN) and see nothing but losses (BP (BP) the exception of course). They explain:Here's the ETF for the major oil companies in the S&P 500, the XLE.
Most energy stocks are currently trading below their mid-March levels when oil prices hit their lowest levels in >6 years. Earlier this year investors expected a v-shape oil price recovery, which partially shielded the stocks. But given the current over-supply, weak global demand, rising crude inventories, and strong shale production despite sharp capital spending cut, many investors are beginning to doubt the sustainability and magnitude of the recovery. We believe oil prices could stay lower and for longer than expected based on the low level of M&A activities as the gap in expectation between potential buyers and sellers remains wide....MORE
As you can see, the ETF has not yet declined below the December and January lows but any further weakness in the price of crude is all it's going to take to scare the speculators who bought the fakeout breakouts.
