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BlackRock Analyst Gives Top Energy Picks

Friday, 22 Jul 2011 | 7:48 PM ET

With the rising price of oil putting the spotlight on energy, BlackRock Managing Director Dan Rice gave his top energy investment picks to CNBC on Friday.

Fuel for Your Fund: Oil Over $120?
Stock picks for all energy investment needs, with Dan Rice, BlackRock portfolio manager/head of global resources, who says his firm is currently trying to predict the long term price of crude oil, which might reach $120 per barrel.

Crude oil settled at $99.87 a barrel Friday, its highest since June 9, but Rice said his long-term focus on commodities means he is not looking at "where crude oil is going to be next week, but where it’s going to (be) two or three years down the road."

Rice said there is a "really good chance" crude oil could climb as high as $120 a barrel in the next two years, "if the world economies do not go into a recession.”

Rice said China is "the number one driver right now," noting the country currently demands 800,000 of the 1.3 million barrels of oil in the world.

He also said natural gas is a viable fuel source if the price of crude oil stays above $70.

Rice's Energy Picks:

Coal stocks rank high with Rice, namely Alpha Natural Resources and Consol Energy.

"The coal story isn’t a U.S. story—it’s a U.S. export story. So we’ve doubled exports of coal in the United States to satisfy world demand, which is growing substantially," especially with the power plant growth in China and India, Rice said.

He also likes Range Resources: "We think the stock is worth, as a stand alone, $70, but they’re limited in how much they can spend and how much value they can create on their balance sheet."

He also thinks Plains Exploration and Production is undervalued, because of its "great positions in shale plays" and a deep water property in the Gulf of Mexico it will be financing.

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Disclosures:

BlackRock owns a significant number of shares in one or more of the companies mentioned in this article.

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