RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Biden says no more fossil fuels. You're missing the point.
There are two points here:
1- Oil and Gas Will Continue to Face Stronger and Stronger Headwinds
It's not about the absolute number of EVs on the road now, it's the growth trend and direction of things. EV sales are growing exponentially. You thought gas vehicles had a good growth rate over 15 years, but EV sales have that growth rate in less than 2 years. So gas vehicles are losing more and more of the pie. The pie is getting bigger, so that's hasn't hurt yet, but you have to be blind not to see that it eventually will hurt the bottom line of oil stocks.
Beyond that, oil and gas stocks are under pressure due to divestments from major funds and holdings.
And even beyond that, public policy and opinion will continue to increase the headwinds that the oil and gas industry has begun to face.
Finally, innovation will inevitably cut into oil and gas' current price advantage.
So I don't see a huge rebound to $100 being possible. Not only is the world flush on the supply side, but the demand side will be undercut by factors mentionned above. Back to $70? Why not. But this industry doesn't have many booms left in the tank IMO. Right now Iran, Libya and Venezuela are in the dumps, OPEC has cut production massively, and yet oil prices still linger at $54. Unless US shale production plummets catastrophically, I don't see how you can believe in a huge, lasting rebound.
2- Renewables Aren't as Useless as You Believe
Onshore wind has already reached price parity in the 9 countries which use it the most, and it is the cheapest source of energy, beating even natural gas:
https://www2.deloitte.com/insights/us/en/industry/power-and-utilities/global-renewable-energy-trends.html
Renewables are set to provide around 30% of global electricity production by 2023.
https://www.iea.org/renewables2018/
So you see, renewables are growing fast, accounting for 70% of global energy production growth. Yes, 70%.
So many things could hurt future oil prices on the supply side (Venezuela and Libya getting their act together, sanctions being lifted off Iran, OPEC increasing supply, US shale increasing supply...), while on the demand side renewables will be cutting into possible growth. On the policy side, public opinion already favours renewables and will only do so more and more as technology improves.
Oil and gas could be under pressure from every possible direction. Do you really want to invest long term against those trends?
tradewindsblow wrote: @ yggdrasill, For fun I will concede that 1/10 new vehicles are electric and will even concede that 1/10 of the power from them come from solar/wind/nuclear plants, so that's 1/100 new vehicles which is very optimistic ! What about all the power for the new furnaces and a/c and construction of industry as 2nd world countries develop ? My point is that the low prices are not from lack of demand but from oversupply ! This happens with all commodities as it's very cyclical over funded in good times and under funded in bad times. Your theory on western powers cutting back on energy production proves this and the elastic band will rebound. Anyways just a quick note on the fly. Good luck. p.s. Check out the nuclear stocks this tells me the demand for uranium isn't there which it hasn't been for years. Cameco has shut down a lot of their mines ( care and control), so where does the power come from ? if you say solar/wind the conversation is done lol.