Skip to main content

Market Overview

Fund Manager Franklin Templeton Bets On Higher Oil Prices

Share:
Fund Manager Franklin Templeton Bets On Higher Oil Prices

Franklin Templeton Investments, which has $740 billion in assets under management, has been making some big bets that the oil rally is far from over. WTI prices, which dipped near $26/bbl in February, have recovered to around $50/bbl in recent weeks. However, Franklin Templeton believes that prices are not yet high enough to balance the oil market.

“Can we get enough supply at $50 a barrel? My guess is not,” Franklin analyst Frederick Fromm said.

“Longer term, we need at least $65 a barrel.”

Related Link: Goldman Sachs Reviews U.S. Rig Count And Updates Production Forecasts

With global oil demand continuing to rise, the firm believes $50/bbl is not a high enough price for producers to meet global demand.

Franklin Templeton is predicting higher oil prices will benefit U.S. shale producers who were hit hard during the downturn, including Anadarko Petroleum Corporation (NYSE: APC), Occidental Petroleum Corporation (NYSE: OXY) and Apache Corporation (NYSE: APA).

The firm has been selling shares of integrated oil giants BP plc (ADR) (NYSE: BP) and Exxon Mobil Corporation (NYSE: XOM) and buying shares of E&P stocks.

The firm’s commodities funds now have a record 41 percent of assets invested in E&P companies.

Fromm says that oil prices will eventually settle into a long-term range between $65/bbl and $85/bbl.

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

Latest Ratings for APC

DateFirmActionFromTo
May 2019Seaport GlobalDowngradesBuyNeutral
May 2019Cowen & Co.DowngradesOutperformMarket Perform
May 2019Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for APC
View the Latest Analyst Ratings

 

Related Articles (APC + OXY)

View Comments and Join the Discussion!

Posted-In: Analyst Color Long Ideas Hedge Funds Commodities Markets Analyst Ratings Trading Ideas General Best of Benzinga

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com