$100 Oil Forever

Energy is a good investment.

China energy per capita

China energy use per capita is peaking.

 

Population peaking.

China steel production is peaking.

Energy Material Demand for Green Revolution

We will need a lot of copper, aluminum, lithium and steel. 

Energy consumption Vs. GDP per capita

As India and China develop their economies, electricity consumption will increase. 

Energy Vs. Technology

Where would you rather be?

Energy CAPEX to Sales Ratios are Low

Oil can go much higher. 

Electricity prices about to double

It is not over yet. Paper, glass, metals, fertilizer, beer, gas shortages are coming.

Cycles

I think we are in the Market Top section, which means we should be in energy stocks. 

Core CPI

The discrepancy between CPI with and without food and energy. 

Energy Dependence Europe

Europe is shooting itself in the foot by banning Russian energy.

 

The importance of fossil fuels

If oil and coal are going away, gas and renewables will need to rise a lot. 

Europe Energy Supply

Europe has diversification in energy supply.

Coal is still more competitive to natural gas.

Coal prices are set to fall.

 

Unless Ukraine gets invaded.

Coal energy generation will increase.

In summary:

Best Commodities During Rate Hike Cycle

During rate hikes you need to be in energy!

Energy Vs. Population

More people means more energy consumption. What if energy gets cut off?

Glencore CEO on Commodity Bull Market

Glencore's Glasenberg full interview, fast forward to the one-hour eleven minute mark.

Summary:

• Infrastructure spending in both China and U.S.A will boost commodities.
• COVID-19 continues to impact supply.
• Lower grades and more difficult jurisdictions impact supply.
• China stockpile supply is temporary as they need to restock eventually.
• 80% of the world energy demand needs to be replaced from fossil fuels to renewables.
• Renewable energy needs to transition: 3000 GW to 26500 GW in 2050.
• Solar Panels: 20 times more demand.
• Electric Vehicles: 18 times more demand to 55 million electric vehicles.  
• Wind Turbines: 11 times more demand.
• Copper: 30 million tonnes of demand per year today. 1 million tonnes per year increase per year needed to arrive to 60 million tonnes of copper per year.
• Nickel: 2.5 million tonnes per year today to increase to 9.2 million tonnes per year.
• Iron Ore: China is pushing their companies to increase iron ore supply for green energy (wind turbines and electricity pylons). 

European Green Energy Stocks

If you want to invest in green energy, here are some candidates.

 

AET demand for copper will push prices higher

Alternate energy transition will spur copper higher. Goldman Sachs gives a price target of $6.5/lb by 2025.

Confirmed by Katusa.

While copper mine supply growth is diminishing.

Copper supply and demand point to a deficit from 2025.

And copper stock levels are very low due to shortages.

For example, in Belgium, by 2026, every company car will be electric. That's 60% of all the cars in Belgium.

To bet on the rise of copper, you can buy the highest cost copper mines. For example Capstone Mining which has a C1 cash cost of $1.7/pound.

 

Capstone Mining has the only permitted greenfield project in Chile and there are not a lot of them.

Clean Energy Future Vs. Oil

 There is a clear path in transitioning oil to clean energy.

Thermodynamic Oil Collapse

Very informative video on oil and why you shouldn't invest in it.

As you can see on the chart below, bond yields and GDP are correlated to the net energy delivered to the economy. As net energy declines to zero, GDP will also keep declining. The reason is that it costs more and more to produce energy. We will need to have some sort of more efficient energy source like nuclear energy...

 

Interesting to note is that GDP is correlated to bond yields and they follow the orange line exactly.

The figures below give the energy yield for various sources.

The good part is that green energy has less CO2 emissions.

Oil Oversupply in the Next 2 Months

Rystad Energy reports that oil will be in oversupply in the next two months. Oil has now fallen back below $40/barrel.

U.S. oil production will also come down.