While these are definitely good news for investors in the oil and gas (O&G) space, caution should still be exercised when investing in downstream O&G stocks. This is especially so for downstream O&G service providers who are dependent on significant investments from upstream producers.
Here are some reasons why upstream producers might not be so confident despite the deals:
1) Coverage
While the OPEC and non-OPEC deal covers the majority of oil producers, they do not cover everyone. Looking at the top 10 producers of 2016 alone, 3 key producers are currently not part of any agreement to restrict output.
Source: CNN Money |