The FTSE 100
What has dragged down European indexes? In large part, energy was the culprit. Total
The most notable example was in 2010, when BP
While today's 0.56% drop in the FTSE isn't significant, the energy news causing the drop is a reminder that companies within the energy space take on more risk as they move to more unconventional reserves. Chevron's leak in Brazil is estimated to amount to just a few thousand barrels -- far less than the 4.9 million that leaked from BP's Macondo well. Yet Chevron is being threatened with up to $11 billion in litigation from Brazilian authorities. The lesson? Diversification is more important than ever if you're an energy investor. That being said, with companies in the sector trading between five times and 10 times earnings, any continued drop should yield some very solid bargains for investors in the space.
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Eric Bleeker owns shares of no company listed above. Motley Fool newsletter services have recommended buying shares of Total and Chevron. The Motley Fool has a disclosure policy.
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