As Investors Bet on Green Energy, Oil Rises to Pandemic High

Edited and Curated by ZYTrade

Some investors are wagering that Wall Street’s preference for green energy will depress spending on oil extraction, setting the stage for supply shortages and higher fuel prices.

The bets come as money managers line up trillions of dollars for wind, solar and other renewable programs and expenditures on oil projects tumble. The drop in fossil-fuel spending is becoming so severe that energy companies could struggle to quench the world’s thirst for oil, some analysts say….

Crude is still expected to remain in high demand over the next decade to make transportation fuels and petrochemicals used for plastics and other household products. U.S. consumption has surged lately following the worst of the coronavirus pandemic, and output cuts by the Organization of the Petroleum Exporting Countries have given prices a further boost….

Leigh Goehring, managing partner at commodities-focused investment firm Goehring & Rozencwajg Associates, said he thinks prices will soar in coming years as consumption tops production capacity for a sustained period for the first time ever. His firm lifted its investments in energy producers during last year’s crash and has maintained those holdings.

‘This is the basis for the next oil crisis,’ he said. ‘We’re in uncharted territory.’….

For now, many are positioning for shortages. Hayal Ahmadzada, chief trading officer at the trading arm of Azerbaijan’s national oil company, drives a Tesla Inc. electric car but expects crude to rise above $100 a barrel next year.

Original post on WSJ

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