The energy chief of
The Blackstone Group LP
) stated that the company is anticipating huge profits from
long-term private equity investments in energy sector in spite of
the current market volatility. This has been reported by
According to Blackstone, the fast-growing markets of Southeast
Asia and Latin America, along with the power-starved regions of the
Middle East and Africa, are currently consuming a large proportion
of global output of energy and will drive future demand with
population growth. This makes long-term investment in energy a very
This analysis comes in the wake of investors shying away from
energy stocks because of dwindling oil demand and overall sluggish
economic growth in the U.S. Although record improvement in the
production of natural gas in the past year has left inventories
brimming and pushed the prices to record lows, it has not been able
to positively influence investors' confidence in the sector.
The volatility seen in the market is mainly due to the ongoing
developments in troubled nations of Iran and Greece. This has kept
the world away from investing in energy stocks. Moreover, the U.S.
has threatened to block Iran's economic ties with other nations if
the country does not abort its nuclear program. This is also a huge
matter of concern for the investors.
Further, the investors' sentiments are badly affected by the
financial crisis in Greece and the uncertainty in global
Blackstone recently invested $2 million in
Cheniere Energy Partners LP
) which owns and operates the Sabine Pass LNG receiving terminal in
Louisiana for construction of gas-liquefaction plant for export
markets. This step was in line with the company's optimistic views
regarding energy sector.
We believe that Blackstone's ideas regarding the future of
energy sector is quite apt. As pointed out, demand for energy is
ever-increasing, and that is why the investors must continue to
invest in this sector.
Moreover, a Thomson Reuters report revealed that private equity
investments in energy sector have outpaced the performance of the
general American stock exchanges. With consistent returns from
investments in energy sector, we expect Blackstone to gain in the
Currently, Blackstone retains a Zacks #3 Rank, which translates
into a short-term Hold rating.
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CHENIERE ENERGY (CQP): Free Stock Analysis
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