While Big Thinkers Hate Fossil Fuels, Investors Make Big Profits

Share this article:

The price of coal is up 7.9% YTD and is back at $154 per ton.

Oil prices for WTI crude are up 6.7% YTD to $82.17 per barrel while Brent is up 6.5% YTD to $86.47 per barrel.

Natural gas (Henry Hub) is up as much as 19.9% to $4.23 per MMBtu.

The European benchmark Dutch TTF Natur Gas rises YTD already 23.64% to 87.355 euros ($99.72).

As a result, spot prices for fossil fuels continue to rise, which ultimately means higher costs for consumers, and they are feeling it the hard way. The latest U.S. CPI figures show that energy items rose 29.3% YoY. This includes gasoline by 49.6%, electricity by 6.3%, and gas by 24.1%.

The picture in the European Union is no better. Energy prices here also rose by 26% YoY in December.

It is clear that the political attitude in many countries is negative towards fossil fuels. If we look at the measures taken by President Joe Biden in the U.S., we see that he has, for example, canceled the Keystone XL pipeline. In addition, 20 countries including the U.S., U.K., and Canada have said they will stop funding fossil fuels.

In Europe, we see the same picture. While the big gas fields are being shut down, most countries say they will stop using coal in the near future. Germany wants to accelerate the coal phase-out and now wants to exit in 2030.

Meanwhile, these voices also come from the population that the exit from fossil fuels must take place to battle climate change.

The question that then arises is whether the majority of people will accept a reduction in their standard of living. And what about the people who still have no electricity. Almost 1 billion people in the world have no access to electricity. They would rather raise their standard of living with cheap electricity than lower it.

So while the big thinkers are against fossil fuels, investors who have gone against mainstream opinion are on the winning side today.

This week, major oil producers hit a new 52-week high, including:

NameTickerPrice%YTD% 1Y
BPBP$32.0420.32%25.80%
Exxon MobileXOM$70.6315.43%40.39%
Chevron CorporationCVX$128.969.89%35.05%
Cenovus EnergyCVE$14.8520.93%127.76%
Canadian Natural Res.CNQ$51.9422.94%99.54%
ConocoPhillipsCOP$86.7420.17%81.20%
Marathon PetroleumMPC$74.7416.80%64.19%
Suncore EnergySU$28.2312.78%45.67%

And what about the largest coal producers? These have also already been able to make an upward movement this year.

BHP Group (BHP) +10.97% YTD at $66.97
Rio Tinto Group (RIO) +12.64% YTD at $75.40
Vale S.A. (VALE) +9.70% YTD at $15.38

It shows once again that investors should not follow the call of the mainstream and politics but should look logically at things. Even if many voices are against fossil fuels, they are still necessary. The majority of the global population still drives combustion cars, relies on coal power, or uses natural gas. Just because someone stands in front and speaks out against it doesn’t mean that life will change overnight. Especially since the companies are highly profitable.

Leave a Reply

Change Language
%d bloggers like this: