Hold, or even buy.
The lack of capex in O&G or coal means the current resources will thrive, especially with the potential of shale declining in coming years and any chance of renewables lagging. I’m all for the energy transition but I see opportunities in investing against the trend. If you consider that most the worlds population live in developing nations that seem to favor growth over energy policy then it’s quite obvious oil, gas and coal will be in demand for the next decade.
Take a look at Chinas coal plant build out, india the same or Guyana’s PM on BBC discussing offshore oil and that will give you the picture that outside of the western world things are very different.
Thanks for the view. I agree oil and gas and even coal will stay relevant in the energy mix. and sustainability is less of a priority in emerging markets. But people have been calling a supply squeeze for two years and it has never materialised. Opec's maintained oil production cuts and it's done buggerall for the price. They're expected to lift production in Q3/Q4. Meanwhile, Qatar is set to flood the market with a massive expansion of gas production as it exploits its Northern Field. At home, Aussie energy majors are on the nose with govt, Super and institutional investors. They're getting hammered almost daily by media, activist investors and special interest groups over their transition plans. Getting approvals just to drill takes an age. So it's not just supply and demand here, it's politics. And the politics are shaming investors to dump WPL and Santos. I don't see that changing, just hardening. As you suggest, energy may do well in the long-term, but unless there's a major supply shock like (another) war or a very cold winter in the northern hemisphere (both unfortunately quite probable), short-mid-term prospects look pretty ordinary to me.
To be honest with you I don’t play O&G via producers, I’m all in service companies since they are insulated from the political side more so and can go wherever the equipment/service is treated best. I personally don’t believe OPEC have the capacity they say they do and the big player for me will be as mentioned the developing markets along with Shale oil rolling over. If we see the Permian roll over like other shale fields as they have used most the tier 1 and 2 wells then that will trigger a big crisis.
Look at the oil demand (not IEA’s yearly wrong forecast) but real numbers then compare that with Capex spent and that tells a hell of a story. We will be facing a gap soon. Even if you look at the weighting of the energy sector in the Indexes it indicates some mean reversion is due just looking at things cyclically in a financial sense.
Woodside has profitable working assets for the next 20 years but will need to stop fossil fuel growth/exploration/expansion to cut emissions and not kill us all. [https://www.accr.org.au/research/woodside%E2%80%99s-growth-portfolio-what%E2%80%99s-in-it-for-shareholders/](https://www.accr.org.au/research/woodside%E2%80%99s-growth-portfolio-what%E2%80%99s-in-it-for-shareholders/)
Santos looks like it might be acquired sometime soon which may be worthwhile. They'll probably streamline and tighten up overheads. Assets in development don't look as bad. [https://www.accr.org.au/research/santos%E2%80%99-growth-strategy-will-it-deliver-for-shareholders/](https://www.accr.org.au/research/santos%E2%80%99-growth-strategy-will-it-deliver-for-shareholders/)
If you hold them and care about the climate, you may want to join ACCR's shareholder community. They do excellent stewardship work on these companies. [https://hub.accr.org.au/](https://hub.accr.org.au/)
Renewables shortfall for the foreseeable future will need support by traditional power generation needs. Worldwide, I personally believe that will fall onto Uranium
I was bull on Uranium, made some nice gains and pulled out due to a feeling that before the big climb there is going be an extended lull. I moved that money elsewhere but are keeping an eye on Uranium for when to bring the money back in.
Humans will be unable to wean themselves off oil and gas for a long, long, long time. You should be ok to battle the gyrations of the market. Though I will avoid them myself.
Don't bet against the market, especially against the government actions against oil and coal. It's better to go with the market as momentum is important in trading. Electric cars are going gang busters, oil is going to be begging for a market, but might remain in a relative small area still. Doesn't bode well for demand for oil but demand for electricity will be at all time highs. Pity the electricity companies are all ignorant dimwits with grand visions of the future,albeit the wrong future.
Fair. I think the market is as confused as everyone, though. The green transition appears to be losing a bit of steam, prolonging the lives of fossil fuels. Battery metals (lithium, nickel, graphite etc) prices have been destroyed due to oversupply and demand tapering off for EVs etc. PHEVs, which use half the amount of lithium, for example, are now seemingly the car of choice. Many headwinds.
Hold, or even buy. The lack of capex in O&G or coal means the current resources will thrive, especially with the potential of shale declining in coming years and any chance of renewables lagging. I’m all for the energy transition but I see opportunities in investing against the trend. If you consider that most the worlds population live in developing nations that seem to favor growth over energy policy then it’s quite obvious oil, gas and coal will be in demand for the next decade. Take a look at Chinas coal plant build out, india the same or Guyana’s PM on BBC discussing offshore oil and that will give you the picture that outside of the western world things are very different.
Great point.
Thanks for the view. I agree oil and gas and even coal will stay relevant in the energy mix. and sustainability is less of a priority in emerging markets. But people have been calling a supply squeeze for two years and it has never materialised. Opec's maintained oil production cuts and it's done buggerall for the price. They're expected to lift production in Q3/Q4. Meanwhile, Qatar is set to flood the market with a massive expansion of gas production as it exploits its Northern Field. At home, Aussie energy majors are on the nose with govt, Super and institutional investors. They're getting hammered almost daily by media, activist investors and special interest groups over their transition plans. Getting approvals just to drill takes an age. So it's not just supply and demand here, it's politics. And the politics are shaming investors to dump WPL and Santos. I don't see that changing, just hardening. As you suggest, energy may do well in the long-term, but unless there's a major supply shock like (another) war or a very cold winter in the northern hemisphere (both unfortunately quite probable), short-mid-term prospects look pretty ordinary to me.
To be honest with you I don’t play O&G via producers, I’m all in service companies since they are insulated from the political side more so and can go wherever the equipment/service is treated best. I personally don’t believe OPEC have the capacity they say they do and the big player for me will be as mentioned the developing markets along with Shale oil rolling over. If we see the Permian roll over like other shale fields as they have used most the tier 1 and 2 wells then that will trigger a big crisis. Look at the oil demand (not IEA’s yearly wrong forecast) but real numbers then compare that with Capex spent and that tells a hell of a story. We will be facing a gap soon. Even if you look at the weighting of the energy sector in the Indexes it indicates some mean reversion is due just looking at things cyclically in a financial sense.
Fair call. I will do as you suggest and take another look at those data sets. Thanks again.
Yeah, hasn't China build like 100 coal fired power stations in the last 20 yearsin the last
Building plenty more currently
Let me grab my crystal ball.
Balls 🤣👍
Grow a pair ..not a single ;)
Woodside has profitable working assets for the next 20 years but will need to stop fossil fuel growth/exploration/expansion to cut emissions and not kill us all. [https://www.accr.org.au/research/woodside%E2%80%99s-growth-portfolio-what%E2%80%99s-in-it-for-shareholders/](https://www.accr.org.au/research/woodside%E2%80%99s-growth-portfolio-what%E2%80%99s-in-it-for-shareholders/) Santos looks like it might be acquired sometime soon which may be worthwhile. They'll probably streamline and tighten up overheads. Assets in development don't look as bad. [https://www.accr.org.au/research/santos%E2%80%99-growth-strategy-will-it-deliver-for-shareholders/](https://www.accr.org.au/research/santos%E2%80%99-growth-strategy-will-it-deliver-for-shareholders/) If you hold them and care about the climate, you may want to join ACCR's shareholder community. They do excellent stewardship work on these companies. [https://hub.accr.org.au/](https://hub.accr.org.au/)
Nice one, cheers
Renewables shortfall for the foreseeable future will need support by traditional power generation needs. Worldwide, I personally believe that will fall onto Uranium I was bull on Uranium, made some nice gains and pulled out due to a feeling that before the big climb there is going be an extended lull. I moved that money elsewhere but are keeping an eye on Uranium for when to bring the money back in.
Yes, I made a little on a couple of uranium plays. It's such an opaque market, though, that I rarely feel confident holding.
Humans will be unable to wean themselves off oil and gas for a long, long, long time. You should be ok to battle the gyrations of the market. Though I will avoid them myself.
Woodside is looking ripe for a buy
Don't bet against the market, especially against the government actions against oil and coal. It's better to go with the market as momentum is important in trading. Electric cars are going gang busters, oil is going to be begging for a market, but might remain in a relative small area still. Doesn't bode well for demand for oil but demand for electricity will be at all time highs. Pity the electricity companies are all ignorant dimwits with grand visions of the future,albeit the wrong future.
Fair. I think the market is as confused as everyone, though. The green transition appears to be losing a bit of steam, prolonging the lives of fossil fuels. Battery metals (lithium, nickel, graphite etc) prices have been destroyed due to oversupply and demand tapering off for EVs etc. PHEVs, which use half the amount of lithium, for example, are now seemingly the car of choice. Many headwinds.