Oil & Energy Investor by Dr. Kent Moors

Recent Geopolitical Events Mean Some Major Movement in Oil

by | published January 19th, 2020

Action to Take: Buy an April 2020ProShares UltraShort Bloomberg Crude Oil (SCO) $12 put (SCO200417P00012000). Use a $2.10 buy limit order good until filled.

Let it never be said that events in the Persian Gulf don’t throw monkey wrenches into my foreign meetings with members of my global contact network.

The U.S. air strike that killed Iranian General Qasem Soleimani has resulted in our scrapping much of the accepted agenda for a new one based on what we used to call RRI (“rapid response intel”) from my intelligence days.

That, and running up large phone bills to sources in the Middle East, Europe, and even Asia.

When the dust settles next week, I hope to relate what has been going on in these sessions, or at least what can be circulated publicly

“ESG” Is Changing How Major Investors Play the Energy Sector

by | published January 17th, 2020

In the last Oil and Energy Investor I discussed how major energy sector investors have been revising their priorities. Crude oil, natural gas, and even coal are still in the mix. But these more traditional money moves are more frequently becoming regional plays, as investors assess demand requirements in expanding areas like Asia.

Then there are the longer-term prospects of advances in technology and methodology. In addition to multi-year R&D efforts that are not expected to result in revenue flow for some time, the ongoing pursuit of breakthroughs in the battery and storage sector continues to draw funding, while developments in kinetic energy (generating power from motion) and inversion (transferring DC to AC) are also on the list.

The latter remains a main element in further reducing the cost of generating electricity from solar and wind. In these sources, electricity is harvested as direct current (DC) but must be transferred to alternating current (AC) to move onto the power grid. That transition usually means a loss of energy.

Reducing the inversion loss is the key element in hurdling the last major cost consideration in a larger transition to renewable sourcing. It will be a primary catalyst to reduce further the fossil fuel imprint in the overall global energy balance.

Oil, natural gas, and coal figure to remain the three main sources of worldwide energy for several decades to come. But the advance of renewables remains the single biggest change in the energy mix.

This has already been reflected in how large energy investors prioritize where the money goes. Despite personal preferences and political/cultural bias, the heavy hitters need to see profitable return. Renewables have now demonstrated the bottom-line shine.

And that has resulted in billions moving into solar, wind, and other sources (biofuel, geothermal, chemical) that have a more positive impact.