Income Opportunity In Energy Sector



Energy sector had a thrashing of an 11-year low  which has sent many energy stocks, including shuttle tanker MLP KNOT Offshore Partners (NYSE:KNOP), falling to all-time lows and sending their yields sky-high — in this case, 15.5%.

While it’s true that low oil prices could hurt global offshore drilling demand in the long term.  But, deep sea oil projects take several years to bring online.  New offshore projects are likely to continue driving strong demand for shuttle tankers over the next few years.

In the North Sea, where 40% of KNOT Offshore’s tankers operate, Statoil (NYSE:STO) is continuing with a $7 billion oil project which has the potential to employ five additional shuttle tankers alone, each under lucrative long-term contracts.

Meanwhile, offshore Brazilian oil projects have a breakeven price of around $40 per barrel.

So investment will yield both stable and sustainable revenues.

Source: Fool



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