Tortoise Capital energy portfolio manager Rob Thummel talks with Bobbi Rebell about OPEC, oil inventories, and where he believes the best opportunities are in the sector.
While driving markets today no deal from OPEC but there was a draw down in US crude oil stockpiles let's get more from energy portfolio manager rob them from tortoise capital great to have you thank you. So first let's break down the news today OPEC not to just surprised it's still big impact. Yeah well not nothing really happened from OPEC so that's not a surprise. Really what the surprise was that it was the drop down and well and port which had a big impact on the oil price. What we've seen is welcome oil or OPEC is becoming less relevant. The US has become more relevant he could see that today when oil started down but then recovered. After the information was came out of the energy information says. I think that's what really resonated with people the stock market things much more attention these days talk about why and that connection and how different it affect the markets sure what energy just the basic need everybody needs energy. And what globally what we're trying to do is balance global supply and global demand and what we did Seattle that one piece of news I thought was real interest. Is that we see it downward trend in global inventories that was some information came out of the Qatar. I energy minister that's really interesting because now we know we're getting closer to supply and demand balancing. Which means. That oil prices likely go higher into the future. We've right wing this range training and that's what a lot of people Clinton you see it for at least the short term. You do believe we are gonna break out what will be the catalyst for about how much higher will oil prices go yeah. So here here in the short term Republican be flat oil price of the next several months and that's because US production continues to needs to continue to fall. It's all for the last twelve weeks it will continue to fall for awhile but eventually US production has to stop fall. And we need oil price of sixty dollars or higher. To stop. The decline in US oil production and longer term you're going to the US oil production to balance global supply and demand because OPEC Rupert can't produce much more oil. The US is going to be a long term supplier of oil to the rest of the world annually over sixty dollars a burial. To stop the decline in production so what is the catalyst that gets there at this point given and especially for example OPEC can't make idiotic as we do the inventory situation at felt. Think the cattle will be continued fall or declines in global inventories global inventories are still higher than normal. And so you continue this need need to see lower global inventories started seeing that now because in the second half of the year. Global demand for oil will exceed supply them the equate you'll only balanced. Because we we will reduce our inventory overtime and that's what. Relieved Campbell's is decline in global inventories so. Your portfolio manager you focus on energy stocks when they're asking for yet so we really like the energy infrastructure space right now. Over the next probably six months or so we'll probably going to be arrangement plus or minus five dollars or around fifty dollars of error plus or minus five dollars and there. Energy stocks energy infrastructure stocks are really good bets in those picketers and I you wind really to that recent. The reason why we like you're here structures this you get a healthy dividend. 68% dividend yield. And you a little bit of growth and activity Neil. And so you wind if the market stays flat if he you earn the giving you. What the market goes up in oil prices go up get not only the dividend yield but also the capital appreciation that typically happens in stocks when oil prices. I thank you so you. Our thanks to you for are optimal tortoise capital I've got here about this is partners.