While the overall stock market remains healthy even as stock prices are high, some market segments are worrisome. And the oil segment in the energy sector concern me more than other segments, explains Roy Ward, editor of Cabot Benjamin Graham Value Investor.

Oil prices have fallen to $46.46 per barrel and could fall further. OPEC nations seem to be curtailing production, but U.S. oil producers are drilling with a vengeance; the U.S. oil drilling rig count has increased to 870 rigs from 420 a year ago.

The rapid increase in North American drilling has outpaced demand for oil by a wide margin. The oversupply is increasing inventory, which is causing oil prices to fall. Oil prices are likely to fall further during the next several quarters, with $35 to $40 prices possible within six months.

Lower oil prices will benefit consumers as gasoline prices decline during the summer months. However, lower oil prices could send oil stock prices lower during the remainder of 2017.

Despite my concerns for the sector, I continue to like our four energy holding. Schlumberger (SLB) is a high-class company which has made several smart acquisitions during the past couple of years.

EQT Mainstream (EQM) and Spectra Energy (SEP) provide pipelines and offer high dividend yields, and Alliance Resource (ARLP) is in coal and will benefit from deregulation.

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