Doomberg: The Future Of Energy

These "big" energy solutions will power tomorrow's economy

In today's discussion we look at the all-important energy market.

Remember, without energy, there is no economy.

As we look to the future, where are global energy trends headed?

Which ones are we likely to turn to more to power the world of tomorrow?

And where are the best opportunities for investors likely to lie?

To discuss in depth, we're fortunate to sit down with the green chicken himself: the energy expert Doomberg.

For one of the more important interviews you’ll hear about our future, click here or on the image below:

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Adam’s Notes: Doomberg (recorded 6.3.24)

EXECUTIVE SUMMARY

• The global energy markets are currently well supplied, with some sectors even experiencing oversupply.

• Recent OPEC+ meetings have been described as "flaccid," leading to oil price declines. Indicators such as the front-month calendar spread and crack spreads suggest that the oil market is well-supplied. For instance, the WTI calendar spread is just 15-20 cents, and crack spreads are at only $25 a barrel, both pointing to ample supply.

• The world is experiencing a glut of natural gas, with U.S. natural gas inventories 25% above the 5-year average, indicating significant oversupply. Prices at the Waha Hub in the Permian Basin even going negative. European natural gas prices have risen slightly to $11-12 per million BTU due to outages and geopolitical tensions, but overall, the market remains oversupplied.

• Absent a new geopolitical crises like war in the Middle East or conflict over Taiwan, Doomberg predicts a bearish outlook for oil due to the current oversupply. Conversely, natural gas prices may increase as the current glut resolves, driven by incremental demand and production adjustments.

• Different administrations impact the energy market differently. A Biden administration would likely lead to higher oil prices due to drilling restrictions, which reduce supply and increase prices. In contrast, a Trump administration would encourage more drilling, leading to higher volumes but lower prices.

• Doomberg likens the energy landscape to a football team under a salary cap, where versatility and technological investment are key. Just as a GM would want players who can perform multiple roles to maximize value, the energy sector must develop fuels that can be used in various applications. Technological advancements improve the efficiency and adaptability of different fuels, making them more interchangeable over time. Eventually, all fuels will be able to perform all functions efficiently, and costs will become uniform and low. This analogy underscores the importance of