Deep Dive: Energy Sector Holdings
Objectives:
 Understand the key factors that drive changes in prices of our energy holdings
 Understand how these key factors affect our active return
 For example: If crude oil prices decrease, do our energy sector holdings outperform or underperform
the S&P 500 energy sector?
 For example: same as last question except for gasoline prices.
 For example: same as last question except for natural gas prices.
 Develop your recommendation for whether to maintain energy holdings “as is” or make changes
 Develop your presentation for the first IAC meeting Wed., March 18, 5:30 pm.
Roadmap:
 For Mon., Feb. 9: READ and develop answers for “Questions Energy Holdings Part 1” on the following
slide of this Power Point file.
 By Mon., Feb. 9, I’ll post instructions for Assignment 3: “Energy Holdings Analysis and Recommendation”.
 Mon., Feb. 23: You’ll present your team’s analysis and recommendation to the class; at the end of the
presentations – the class will vote on the recommendation for the IAC.
 After the vote: Decide who will make recommendation at first IAC meeting Wed., March 18, 5:30 pm.
(Note: This won’t be the only opportunity to present at the 1st IAC meeting. Analyses for other holdings –
e.g., Telecom and IYW versus XLK -- will begin Wednesday, Feb. 25.)
1
Questions Energy Holdings Part 1
1) Use information on the U.S. Energy Information Administration (EIA) website to answer the
following (the website is http://www.eia.gov/finance/markets/ )
• Who’s who in the global oil markets per the EIA?
• What are the 7 factors that could influence oil markets per the EIA?
• How does each factor affect oil prices? Gasoline prices? Natural gas prices?
• What are other factors that can affect these prices?
• Based on the information at the EIA website, develop scenarios in which oil prices could
increase. Repeat for oil prices could decrease. Repeat for gasoline and natural gas prices.
2) Read the National Intelligence Council (NIC) report “Global Trends 2030: Alternative Worlds” at
http://www.dni.gov/files/documents/GlobalTrends_2030.pdf
• Based on the information in the NOC report, develop scenarios in which oil prices could
increase. Repeat for oil prices could decrease. Repeat for gasoline prices and natural gas
prices.
3) Sixteen pdfs, ranging from broker analysis to news articles, have been loaded to:
http://www.unm.edu/~lboni01/EDD/
• Based on the information in these pdfs, develop scenarios in which oil prices could increase.
Repeat for oil prices could decrease. Repeat for gasoline and natural gas prices.