Darkest Before Dawn? This Analyst Just Went Long Oil E&Ps

In a new report, GMP analyst Bob Bakanauskas initiated coverage on a number of oil & gas E&P stocks. According to Bakanauskas, the bleak outlook for the space could be the best indication that the market has bottomed.

Bakanauskas believes that the next major move in oil prices is higher and predicts improvement in global oversupply in 2016 and a transition to undersupplied conditions by 2017.

“Our preference is for quality assets with low full-cycle development costs providing a competitive advantage,” he explains.

Related Link: How Healthy Would Financial Markets Be Without Oil?

GMP expects that the world will once again need U.S. shale production growth within two years.

GMP has set Buy ratings on the following stocks:

EOG Resources Inc EOG

Noble Energy, Inc. NBL

Occidental Petroleum Corporation OXY

Diamondback Energy Inc FANG

Oasis Petroleum Inc. OAS

SM Energy Co SM
Whiting Petroleum Corp WLL

EQT Corporation EQT

Rice Energy Inc RICE

Earthstone Energy Inc ESTE

Gastar Exploration Inc GST

Disclosure: the author holds no position in the stocks mentioned.