Ok, one of the best Hollywood plot lines is “Follow the Money.” It seems like all of the best detectives follow the money and get their criminal. When you look at the ESG investing funds, you will want to follow Hollywood’s typical plotline and “Follow the Money.” Last week I was interviewed live by Jackie … Continue reading “Is $100 oil a passing fad? You would not believe who is quietly investing in Texas oil companies.”
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Is $100 oil a passing fad? You would not believe who is quietly investing in Texas oil companies.
January 31, 2022
Ok, one of the best Hollywood plot lines is “Follow the Money.” It seems like all of the best detectives follow the money and get their criminal. When you look at the ESG investing funds, you will want to follow Hollywood’s typical plotline and “Follow the Money.”
Last week I was interviewed live by Jackie DeAngelis on the Cavuto Coast to Coast show on the Fox Business Network. We talked about the $100 oil coming around the corner and how we got here. When talking about commodities, you have to look at supply and demand first. Then move to market influencing trends like availability to capital, geopolitical forces at work, and supply chain issues.
Jackie asked a follow-up question on how companies like the ESG investor-focused Exxon would normally take advantage of the higher oil prices to make more money for their investors. Now they are looking at demands from ESG investors, and the government regulations around pipelines and denying permits.
A synopsis of my response: “And it’s a great question. Great comment because it’s a combination and the numbers don’t lie. There’s are fewer permits that they’re allowing, they just shut off 11 million acres in Alaska. …it is not only the regulations, but it is also a lot of people (investors) want to go greener.
.… I coined the word “Greener” because we’ll never go 100% green as we need oil for so many different things other than just transportation or fuel for vehicles. But in the future, we will not have that oil. You have people on the board like Exxon had two or three new board members that are 100 percent green and that hate drilling. So they’re telling their shareholders, let’s don’t drill for oil or gas and not think about this long-term natural gas core profit center.
… so many different reasons why we’re not drilling. But the numbers are there that we’re not going to drill in the next two to three years, and oil prices will be pushed higher. And when that, when that happens, you’re going to pay more at the pump, you pay four dollars, five dollars. I don’t know Jackie, exactly where it’s going to go, but it’s not looking good (for consumers at the pump)”
The New York Times reported last week on the current Biden regulation issues at hand.
“A federal judge on Thursday canceled oil and gas leases of more than 80 million acres in the Gulf of Mexico, ruling that the Biden administration did not sufficiently take climate change into account when it auctioned the leases late last year.
The decision by the United States District Court for the District of Columbia is a major victory for environmental groups that criticized the Biden administration for holding the sale after promising to move the country away from fossil fuels. It had been the largest lease sale in United States history.
Now the Interior Department must conduct a new environmental analysis that accounts for the greenhouse gas emissions that would result from the eventual development and production of the leases. After that, the agency will have to decide whether it will hold a new auction.“
Some interesting developments have been happening since last summer. In some of my past articles, we have talked about the COP26 and Biden administration now designating natural gas and nuclear as “renewable” and eligible for funding designated for renewable projects as they realize that there can be no road to Net Zero without low cost, sustainable, power sources.
It did not take long for the big ESG funds like Blackrock to curb their bans on fossil fuel investments using the green leader’s stealth proclamation of funding eligibility for natural gas. Quietly Blackrock announced, “We’re proud of our commitment to and investment in Texas and Texas-based energy companies” in the carbon-intensive sectors. A truly slick way to invest in oil and gas. The amount of money to be made in the oil and gas commodities market as an alternative investment was too much for them to keep up the ban on oil and gas.
The amount of money to be made in the oil and gas commodities market as an alternative investment was too much for them to keep up the ban on oil and gas. It seems hypocrisy has found the profit margin it needed to cross the line. The quote is in the graphic below.
Even more of an impact than the availability of capital through the ESG investors impacting oil price is the dramatic geopolitical stage being played out in Europe. In my article last week “Geopolitical Tensions and Energy, Oil and Gas Prices will have two outcomes – go up or dramatically go up higher, and here is why.” we covered Putin’s desire to be the Energy Czar of the world. He has laid this chess game out years ago and has only a few moves to checkmate. Once Putin gets the Nord Stream 2 pipeline in service he will be supplying over 80% of Europe’s natural gas. As soon as the pipeline is approved Russia will step to the center stage with Saudi Arabia and become the power couple setting oil and gas supply and prices. Putin will not need to invade, as Germany and most of the European political leaders realize they will be voted out of office if they cannot keep the lights on. Putin is the key to keeping them in political office and power.
It seems like there is a herd of bulls gathering now saying that we will see $100 oil soon. It is fun being at the head of the herd as we have been calling for over $120 and have key data points to back that prediction.
As always check with your CPA if alternative investments are good for your portfolio Take the assessment and see if it is right for you HERE.
Please reach out to our team at any time for answers to your questions.
Jay R. Young, CEO, King Operating
And visit the King Operating Website for more market information and insights.
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