Bill Miller on oil stocks
When asked about which sector he is bearish on during an interview with CNBC, Bill Miller said that he is bearish on oil stocks. He also discussed the reason behind his bearishness.
According to Bill Miller, the oil (USO) (UCO) discovery going on in the present scenario is much higher than the long-term demand. The OPEC (Organization of Petroleum Exporting Countries) is also showing some discipline in its crude oil (BNO) (UWTI) production limit. But Miller believes it won’t work out in the long term.
Miller also said that the US (SPX) (SPY) is making more and more technological advancements that are reducing production costs. As oil stocks have seen a strong rally in the last year, Miller said, “I think almost all the oil stocks out there are way overpriced.”
Donald Trump’s energy policy
Donald Trump’s proposed energy policy mainly aims to increase the production of crude oil. Trump’s stance on increasing crude oil and natural gas output could enhance the current supply glut situation. It could also lead to higher job creation in the United States (IVV) (SPX).
You may be interested to read, Ray Dalio: The Market Has Discounted the Obvious.