Expect oil to rise to around $75 a barrel in the next 2 years as a capital reduction in the energy sector brings demand into line with supply, said Sean Ruhmann, Director of Real Assets for NEPC. Ruhmann added that the best way to play the sector is a long/short commodity strategy to take advantage of the volatility in oil prices. He also advised a long-biased strategy for select E&P and oil services companies, but said he is less bullish on MLPs because they have not been hit as hard by the downturn. Finally, Ruhmann said he expects private equity to benefit from the M&A action if oil prices remain low for an extended time.
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