After rebounding sharply from lows around $26 a barrel in 2016, oil markets are once again under pressure. After trading to nearly $60 a barrel on output cuts from OPEC, oil is once again under pressure trading down to a recent low of $42. Increased production from U.S shale producers and Iran, Iraq, Libya, and Nigeria have flooded the market despite OPEC’s efforts. Energy analysts are making bearish predictions for the remainder of the year.
Deutsche Bank analysts released this article regarding the risks to energy and high yield markets if oil falls to $35 a barrel. The analyst expects that credit defaults will potentially spread from the energy to other sectors in the high yield market. Investors should be defensive about overexposure to energy and high yield risks. Last year energy investors suffered catastrophic losses due to over concentrations in energy investments.
Investors with concerns regarding the risks in their portfolio should speak with a trusted financial advisor. The S&P 500 typically has about a 12% concentration in energy companies. Investors with concentrations exceeding 15% of their portfolio should be wary of having above-average risks of loss to their savings.
ABOUT VERNON LITIGATION GROUP
Vernon Litigation Group is based in Naples Florida with additional offices in Orlando, Florida, Georgia. Vernon Litigation Group currently represents investors with concentrated energy market losses against broker-dealers that made unsuitable recommendations. If you have suffered unnecessary losses in energy at the advice of your stockbroker.
For more information, contact:
Vernon Litigation Group
Phone: (239) 319-4434