Sentiment is changing

[Fraser921]

On yesterday evening's Mad Money, Jim Cramer said "the biggest takeaway should be the remarkable resurgence of the oils" before breaking down the top 10 performers of 2021 and flagging Marathon (NYSE:MRO) as a repeat winner in 2022.
Delivering on the industry mantra, more cash flow, flat drilling budget, modest production growth, large shareholder returns, Cramer flagged every point in his quick pitch of the stock - suggesting the industry's pivot away from the 'drill at all costs' model is gaining traction with generalist investors.
Given the impossible job of making buy-sell decisions nightly on nearly every stock in every sector, energy investors have not always found comfort in Mr. Cramer's oil calls.
Of note, in 2020 and with the sector trading at multi-decade lows, the CNBC commentator called the sector "un-investable" saying oil is a "perma short."
Similar sentiment's were shared recently by Ark's (NYSEARCA:ARKK) Cathie Wood, as she called for the extinction of the crude oil market to track the extinction of the whale oil market.
With an opposing, bullish view of the sector, Blackstone's Byron Wien thinks oil could hit $100 in 2022 as OPEC+ and shale supply fail to keep up with demand growth (NYSEARCA:USO).
For long-term energy investors, having watched the sector (NYSEARCA:XLE) fall from over 10% of the S&P 500 to below 3%, it likely feels somewhat comforting to have stock market commentators discussing the sector at all.

[dan_s]

The problem is that so many of these "experts" live in New York where they get burned at the stake for recommending oil and gas stocks. If they recommend a coal company, they get tarred and feathered first.

The Sweet 16 is currently trading at a forward looking PE ratio (based on my 2022 forecasts) of less than 6X and less than 3X my 2022 operating cash flow per share forecasts. Most of them are "Screaming Takeover Targets".

The common "Paradigm" is that we won't need any oil after 2030. The truth is that oil demand will be much higher in 2030 than it is today; my guess is that 2030 oil demand will top 107 million barrels per day.