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You know what else is? Energy stocks.
I’m not trying to make light of the crisis heat wave that’s going on in Europe, far from it. But the reality right now is that energy for hospitals and manufacturing and air conditioning is squeezing Europe relentlessly right now.
And that is all going on while Euro leaders are trying harder than ever to separate themselves from Russian fossil fuel supplies.
I’m as gung-ho for a renewable future as anyone, certainly more than just about every other energy analysis I know.
But reality is a bitch – and the world just does not currently have the time to focus on renewables right now. They need ready energy, in any form they can get it – including COAL.
There seems to be little help for Europe coming. Biden’s trip to Saudi Arabia resulted in exactly what we expected – some promises, a fist bump and little else.
MbS even went so far as to say that the decisions for more production are not in his hands but in OPEC’s. Heck, everyone knows, he IS OPEC.
Europe is so strung out on energy demand today that the prospect for the coming winter is even more dangerous. Russia’s gas cuts are risking a GDP nightmare for Europe and the EU is calling for an emergency rationing of supplies.
Here in the US, even the State Department is becoming energy analysts – Biden is definitely hoping he can jawbone down prices for oil and gasoline further. It’s all he’s got now, besides the lingering SPR releases he still has planned. But I think the 30 cents that gasoline has come down in recent weeks is about the end of it. Oil’s big move today, along with natural gas and coal is showing how global the energy shortage is becoming – and, according to Rystad, is only going to get a LOT WORSE.
Could I paint a more bullish picture for oil and gas stocks? (and coal and LNG, too?)
Nope, I don’t think I could.
Oil didn’t wait for me to make some further picks on energy stocks, rallying firmly on Monday. The stocks we selected in the last three weeks are already looking mighty fine; eg. Cheniere @ $120, Range Resources @$25.50, EOG Resources @$98 (selling $105c @ $5 bucks!!) .
It’s gonna be hard to top those picks this week – so I’m not going to try.
I think if you didn’t do some buying of stocks in the last two weeks, you’ve missed a terrific opportunity, as I think the Euro heat wave is going to generate some further heat in our stocks as well.
I hate buying stocks as they’re going up, you know that.
But if you are late to the party and want something to munch on, I think EOG still has value around $100 a share. But I’d only go for the short win:
Buy EOG @$100 Sell Sept 105C @$6 – Lovely – 6% on your money and another 5% in alpha upside in only three months.
Also, more speculative:
Marathon:
Buy MRO @ $21.60 Sell Oct 24c @ $1.72 = 1.72/21.6 = 8% + 11% upside potential in only three months.
That’s all for this week.
