Energy stocks stand to benefit from the U.S. industry’s “underinvestment” as oil and natural gas become more expensive, according to Richard Bernstein Advisors. The money manager made the case Monday in a Twitter post, citing the ratio between the number of drilling rigs in operation and the crude-oil price.
There were 445 rigs at work in the U.S. last Friday, according to data that Baker Hughes Co. compiles weekly. That’s equivalent to 5.4 times last week’s settlement price for West Texas Intermediate crude in New York trading. The ratio has averaged 12.1 times since 2010.
The oil rig/oil price ratio reflects underinvestment similar to the 2000s when energy was the decade’s best performer.
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