In this issue:

Subscribers who joined us at the Wealth Summit in Denver late last month got an overview of the major energy sectors, the winners driving the outperformance of our portfolio and the investing philosophy Robert credits for his enviable long-term track record. We’re sharing a shortened version of the presentation today in the belief it can boost your performance as well.

One thing that’s helped us a lot over the last eight months or so has been the focus on the downstream distributors that tend to do better when the price of the commodity they distribute sags. This tendency worked great last fall for gasoline distributors, and should now provide a tailwind for propane merchants for whom the current wholesale discounting means stronger demand and fatter margins. We identify these likely winners as well as the potential losers within our portfolios.

The bottom line is that while commodity price swings are seldom predictable, the beneficiaries of the imbalances they create — or cure — are easier to spot for those with an open mind, the willingness to work hard and lots of patience. Our research and analysis will work best for those with the perseverance to take the long view and the flexibility to adapt it to changing circumstances.     

Commodity Update

Despite OPEC’s decision to keep pumping oil into an arguably well-supplied market, oil prices moved up slightly after initially dropping on the news. West Texas Intermediate (WTI) is back up above $60 at $60.04/bbl, up 13 cents a barrel since our previous issue. Brent crude fell $1.49/bbl to $63.75/bbl. Natural gas prices are trading at $2.76 per million British thermal units (MMBtu), up $0.14/MMBtu since our previous issue and keeping in line with our expectations given the healthy inventory levels.

In Other News

• An analysis released by the EPA indicated that hydraulic fracturing has not led to “widespread, systemic impacts on drinking water resources”

• OPEC agreed to let members continue to export crude at their recent pace, indicating that it believes the global crude oil surplus is now shrinking

• The Energy Information Administration (EIA) expects U.S. crude oil production to fall by 91,000 barrels per day over the next month

• ConocoPhillips (NYSE: COP) announced that it is abandoning shale gas exploration in Poland after failing to find commercial volumes of gas      

• The EPA’s latest Renewable Fuel Standard proposal angered the ethanol industry by calling for less ethanol to be blended into the fuel supply than originally targeted by Congress

• A federal court dismissed a lawsuit by some of the country’s largest coal producers that sought to block enactment of new rules designed to curb greenhouse gas emissions.