RE:Honest questionWithout a doubt, Smokey, we are at the beginning of a major energy crisis. The narrative has been lost on recessionary fears that are oddly priced in, but may never come.
Forget about the war that started last year. It was irrelevant to the macro picture for the most part as all Russian barrels reached market throughout the war. That is not the reason for energy prices.
Think about this: Last year we did not have enough oil and refined products to make it through summer such that worldwide stocks were drawn down at an alarming pace. This happened DESPITE Biden releasing more than 200 million barrels of oil from the SPR.
This year we can see increasing world demand BEFORE China dropped their zero covid policy. Now compared to last year we have imminent rapidly increasing world demand because of China reopening, a 2 million barrel cut to supply from OPEC, no change in supply from USA (growth is over), increased geopolitical risk because of lilkely supply disruption from Russia due to sanctions/cap, AND no SPR releases to save the day.
Layer on a suppressed oil price because the media has managed to sell a recession narrative to cover up the energy crisis, and it's an incredible set up for an investor in energy. The rally is going to be powerful and probably quick as many pros are probably well aware of the upside risk here, but are waiting to see the sentiment and momentum move in that direction before they jump on the train...at the risk of paying a lot more for energy than they could have bought it for from Dec-Feb.
Biden tapped the SPR way too early and actually contributed to the problem. Artificially dropping/low oil prices = less investment leading to an even bigger crisis that could use an SPR to mitigate the pain.
It's really happening. And it's going to be spectacular.
SmokeyOB wrote: Is there any news organization other than those employed by the US government saying that there will be less energy being consumed going into the future? I guess energy produces by oil and gas. Solar and wind power are not reliable. Uranium mines take a long time to produce. Nuclear reactor don't just get built in a day. Just saying energy usage will be going up but where is the energy going to come from?