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When will gasoline prices be coming down? Never, says Benjamin Halliburton, and he's got some ideas about how investors should play that projection.
The chief investment officer of Tradition Capital Management says what we've been seeing is the long-overdue emergence of oil prices from depression levels, in a market where consumers have become addicted to unreasonably cheap energy.
"In perspective to other consumer goods, [$4.00 for a gallon of gasoline] is really not that much," he told CNBC. "In a year or two, gasoline prices will be higher than $4.00 a gallon."
He describes the energy sector as "a long-term outperformer."
Recommendations:
"Our favorite names are actually in the refining sector," he went on. "We like Marathon [MRO
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Halliburton likes the refiners because of their "compressed margins" and subsequent low stock prices.
"The market has recognized that refining margins have collapsed in the face of higher crude prices, because refiners were unable to pass through those [higher oil] prices," he explained. "That will expand out in '08 and into '09, and you'll see an improvement in refining margins."
Disclosure:
Disclosure information for Halliburton was not immediately available.
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