Times are rough, if you’re an energy investor, there’s no doubt about it.
But it’s important to remember why you’re a subscriber here at the Oilprice premium service and why you’re reading my columns every week. Hopefully, it’s to give you a much better long-term perspective on the oil markets and keep you ahead of the rest of the noise that floats around the energy markets.
Look, if you’re looking for a trading insight of whether oil will be above $50 this week or below it, I will tell you that my column is not for you. If, however, you’re looking to the future and trying to make sense of the long-term macro story – well, have I got some information you’ll be interested in.
Let’s look at that macro story this week, now that energy is getting pummeled from every angle and nothing seems investable.
We’ve got a global growing demand that the IEA confirms will reach over 100 million barrels a day sometime in 2018.
We’ve got pipe dreams about renewables being able to take up much of the energy demand slack in the next ten years – but nothing that I’ve seen indicates that renewables will even come CLOSE to the even moderate 10 percent threshold most environmentalists are hoping for.
Those two facts alone continue to make energy the only story that matters. And from an investment point of view, the only one to reasonably bank on, if you ask me.
Sure, Netflix and Tesla stock continue to go higher and I’m not saying you shouldn’t have some of your money in Tech – but neither stock value is truly based on anything tangible – where are the assets?
Nothing in this world moves without energy – nothing. In the end, Netflix and Tesla don’t exist without oil and natural gas to make what they’re selling.
So yes, oil is down today. Yes, the gluts from U.S. shale combined with restarted production in Nigeria and Libya has oil prices on its heels today. And yes, the suspicion of OPEC cheating on production quotas has oil stocks reeling – today.
So anyone looking to trade on where oil is today is looking at the wrong source to tell you.
Anyone who’s looking to invest on where oil will be tomorrow, however, has come to the right place.
Wayne Gretzky said he was never looking at where the puck was, but was always skating towards where the puck was going to be.
That’s what we’re doing here. This week, and perhaps for the next few, there’ll be little puck chasing to do. But hang in there – things will definitely get interesting again.
I guarantee it.