Goehring & Rozencwajg Q2 2021 market commentary: The IEA Ushers in the Coming Oil Crisis

Goehring & Rozencwajg 

The fundamental problems facing global oil markets are much more severe than 2021’s spike in oil prices would suggest.

Our newest commentary, The IEA Ushers in the Coming Oil Crisis, provides an in-depth look at why global oil demand will not taper off due to ESG-related reasons, as the IEA predicts, and supply growth will likely remain restricted — a recipe for a dramatic oil deficit.

• Problems facing the oil supermajors: Exxon, Chevron, Royal Dutch Shell and Total
• Shrinking global oil inventories
• Tightness in the US natural gas markets
• Higher-than-expected Chinese agricultural demand

Goehring & Rozencwajg: Investing in the Uninvestable

 Link:

Today’s indisputable un-investable asset class is energy broadly and crude oil specifically. Oil has been (and remains) the most important input to economic growth in the post-World War II world. However, in the span of only a few short years, oil’s importance has gone from being widely accepted to thoroughly rejected. The financial press argues that oil should beavoided at all costs.

Investors are convinced that global oil demand has already peaked and will decline steadily going forward. In such a world, the oil industry’s billions of dollars of upstream capital investments would become economically unviable or “stranded.” Environmentalists meanwhile are beginning to clamor for the oil industry to pay “damages” for the carbon released over the last 50 years, leaving investors to ponder whether energy assets are actually liabilities.

Jesse Felder Podcast: Leigh Goehring On The Generational Opportunity In Energy Stocks Today

 Link:

You could say that natural resources run in Leigh Goering’s blood. The son of two oil and gas engineers, Leigh has spent nearly his entire life studying markets and investments related to commodities. Over the past 30 years, he has become one of the most brilliant and passionate analysts and money managers in the industry. In this conversation, Leigh shares the details of his macro and micro research process and how he applies them to investing in natural resource stocks. He also details the case for a coming energy crisis and why energy stocks present investors with a generational opportunity today. Below are several notes and links related to this episode:

Goehring & Rozen: On the Verge Of An Energy Crisis

Goehring & Rozencwajg:

2020 Second Quarter Coomentary

How quickly can oil supply be brought back to meet recovering demand?

That is the critical question investors are asking, and the one we strive to answer in this quarter’s in-depth commentary. While most investors believe the lost production will be easily brought back online, our models tell us something vastly different. While OPEC+ production will likely rebound, non-OPEC+ supply will be extremely challenged. Instead of recovering, our models tell us that non-OPEC+ production is about to decline dramatically from today’s already low levels.