Sarat Sethi says oil and gas will ‘stay the leader’

By:
on Nov 23, 2022
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  • Sarat Sethi of Douglas C Lane & Associates says oil and gas remain top picks as markets eye further recovery.
  • The portfolio manager suggests this will be the case even if oil falls to $60-70 per barrel.
  • Top news in the oil sector relates to Saudi Arabian output and looming US price caps on Russian exports.

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Sarat Sethi, the Managing Partner and Portfolio Manager at investment advisory firm Douglas C Lane & Associates, believes oil and gas will lead the market going into 2023.

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The financial expert’s comments on Wednesday came even as oil prices fell more than 4%. The downside pressure has so far seen crude oil trading to lows of $77 per barrel. The 4.6% dip, which happened as stocks opened higher ahead of the week’s last full trading day before the Thanksgiving holiday, means oil could fall to 2022 lows.

In particular, the downside could add to any jitters related to latest news on Saudi Arabia’s oil output.

But despite this outlook, the DCLA executive told CNBC’s ‘Squawk Box’:

“Oil and gas is going to stay the leader. They’ve optimized their balance sheets. Even at $60-70 a barrel, they’re still going to do well.”

If this is the case, then its likely some of the best oil and gas stocks could be very attractive to investors.

Oil price caps won’t hurt Russia

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Sethi’s remarks also come at a time the US is reportedly on the cusp of declaring a price cap on oil exports from Russia. However, Helima Croft, the Global Head of Commodity Strategy at RBC Capital Markets, thinks the price caps that the US is considering will only help “keep Russian oil on the market.”

Speaking to CNBC’s ‘Squawk Box’ on Wednesday, the OPEC watcher and geopolitical enthusiast noted:

“If you look at the price they’re thinking about for oil price caps, it’s essentially what Russia is getting now…Price caps are not a measure to reduce Russian revenue, but a way to keep Russian oil on the market. You are not defunding Vladimir Putin.”

While Sethi is bullish on oil and gas going into 2023, he does think financials, industrials, and commodities could be ones to watch.

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