What is keeping investors out of oil & gas stocks?
Posted: Fri Sep 07, 2018 5:28 pm
"The prices of crude oil and natural gas liquids are much higher than they were a year ago and the outlook for natural gas prices has improved. However, dozens of profitable upstream oil & gas companies are still trading in the lower half of their 52-week range. The money managers on Wall Street either don’t understand how profitable upstream companies are at these commodity prices or they believe oil prices have peaked and are going to fall."
The quote above is from an article that I wrote for OilPrice.com in July. All of the "FEARS" that I cover in the article are still valid today.
Here is the link: https://oilprice.com/Energy/Crude-Oil/W ... tocks.html
I think Wall Street money managers have some new concerns:
1. President Trump's "Tariff War" with China will lower oil demand. < I doubt it.
2. EV's will lower oil demand. < zero chance of this happening
3. President Trump will back down on the sanctions against Iran. < zero chance of this happening.
Today's employment report was very bullish for energy demand: Over 200,000 more people went to work and unemployment remains at 3.9%. No matter what you think of Trump, his policies are definitely good for the U.S. economy.
Here are comments from Raymond James on why EV's are NOT GOING TO LOWER OIL DEMAND. From the slide that RJ spoke from at our July 16th luncheon in Houston:
1. EVs cost 20% to 30% more than comparable ICE vehicles
2. Conventional engine technologies are improving fast
3. Limited range of EVs doesn't suit most drivers
4. Massive / costly charging infrastructure is still needed
5. Environment issue #1: Battery disposal issues
6 Environment issue #2: The electricity of charge them. In China it will come from coal fired power plants.
7. There are very few EV light truck and SUV options
8. Battery life-cycle cost: Tesla owners may have zero resale value after 5 years.
Conclusion per RJ: "EV Impact on Oil Demand is WAY OVERSTATED"
The quote above is from an article that I wrote for OilPrice.com in July. All of the "FEARS" that I cover in the article are still valid today.
Here is the link: https://oilprice.com/Energy/Crude-Oil/W ... tocks.html
I think Wall Street money managers have some new concerns:
1. President Trump's "Tariff War" with China will lower oil demand. < I doubt it.
2. EV's will lower oil demand. < zero chance of this happening
3. President Trump will back down on the sanctions against Iran. < zero chance of this happening.
Today's employment report was very bullish for energy demand: Over 200,000 more people went to work and unemployment remains at 3.9%. No matter what you think of Trump, his policies are definitely good for the U.S. economy.
Here are comments from Raymond James on why EV's are NOT GOING TO LOWER OIL DEMAND. From the slide that RJ spoke from at our July 16th luncheon in Houston:
1. EVs cost 20% to 30% more than comparable ICE vehicles
2. Conventional engine technologies are improving fast
3. Limited range of EVs doesn't suit most drivers
4. Massive / costly charging infrastructure is still needed
5. Environment issue #1: Battery disposal issues
6 Environment issue #2: The electricity of charge them. In China it will come from coal fired power plants.
7. There are very few EV light truck and SUV options
8. Battery life-cycle cost: Tesla owners may have zero resale value after 5 years.
Conclusion per RJ: "EV Impact on Oil Demand is WAY OVERSTATED"