In this issue:

When Robert spoke at the Investing Daily summit in Denver back in May, he talked about how investing in energy stocks in the second half of last year felt like trying to swim up the Niagara Falls.

The first half of 2015 wasn’t nearly as bad but didn’t exactly go great. The feeling of going against the flow very much remained, even if the hazards didn’t loom quite as large.

So it seemed perfectly natural to illustrate our mildly disappointing first half performance with a video of salmon leaping past and into bear maws. And you have to feel a little for that bear too, after the salmon he had clenched in his jaws flopped its way back to freedom.

Given how close we came to breaking even in a bearish tape, we know a bit about how that bear feels. If only we hadn’t purged several small-cap drillers too early, if only we hadn’t been as sure about the value still embedded in midstream MLPs, perhaps we too might be enjoying some sockeye right now.

What keeps us going is the knowledge that there will always be other fish in the river, but only if we help readers preserve their capital. So we’re not too broken up about shedding unwarranted risk too soon or being early into some of the bargains created by the recent selling.

On the whole, our recommendations wouldn’t have cost anyone too much capital so far in 2015. In these energy markets, that’s something.

We remain very bullish on the refiners that have helped us outperform industry benchmarks, but also on constant lookout for bargains among drillers, as the stock screen in this issue elaborates.

That’s a pursuit that will reward patience rather than speed. We’re cultivating ours in these treacherous crosscurrents.

Stay tuned for a new Best Buys list in the next issue.  

Commodity Update

The likelihood that a nuclear deal with Iran is drawing near sent crude prices tumbling more than 10% since our previous issue. West Texas Intermediate was down $6.22/bbl to $52.35/bbl near midday Monday, while Brent crude traded at $57.89/bbl. Natural gas prices declined to $2.70 per million British thermal units (MMBtu), down $0.11/MMBtu since our previous issue. While the short-term outlook looks bearish for oil, a lot of the bad news is likely priced in at this point. Should the price of WTI drift down to the neighborhood of $40/bbl, it will mark a strong buying opportunity for patient investors, as that price is simply not sustainable.

In Other News

• Greece’s initial rejection of bailout terms spooked the oil markets, helping to send the price of oil down nearly 8% in a single day a week ago

• The Energy Information Administration’s (EIA) latest Short Term Energy Outlook (STEO) projects that U.S. oil production will decline by 500,000 bpd in the next six months

• The EIA also reported that U.S. oil production in April was at the highest level since 1971

• Nuclear talks with Iran that could bring even more oil into the market went past their deadline, but all parties agreed to continue negotiating

• The US rig count rose this past week, breaking a streak of 29 straight weekly declines.