Expect energy to continue to soar in the foreseeable future.
1. The world is running out of oil.
The oil minister of Saudi Arabia has warned that the world will run out of oil by 2030. His United Arab Emirates counterpart mentioned OPEC would be unable to guarantee sufficient oil supplies when airplane travel and China come back full throttle.
2. Environmental, social and governance (ESG) mandates stop plans to expand oil production.
Higher demand and lower supply means higher prices.
JPMorgan’s chief executive, Jamie Dimon, believes oil prices could surge to $175 a barrel later this year. Jeremy Weir, the head of commodity trader Trafigura, says oil could go parabolic. Energy Aspects says we are facing perhaps the most bullish oil market there ever has been. Warren Buffett’s Berkshire Hathaway has made big bets on energy.
The bull market in energy stocks is just starting. Energy could become the dominant sector in the financial markets in the 2020s.
Sven Franssen