Did Elon Musk say what I thought he said?
“Hate to say it, but we need to increase oil and gas output immediately. Extraordinary times demand extraordinary measures,” Musk tweeted on Friday.
When the CEO of Tesla and world’s greatest innovator is calling for more oil and gas production, you know there’s an energy crisis.
Oil hit $130 per barrel on Sunday, its highest price since 2008.
As it turns out, I picked the wrong day to do my fiancée a favor and fill up her gas tank.
I’ve been monitoring the global energy crisis for a while.
My view has been that tight supply is here to stay, and energy prices will continue to remain high.
I wrote about it back in November, when oil was trading at $75 per barrel.
The Russia conflict will continue to tighten the global energy supply, so things could get worse in the near term.
But, at this point, I wouldn’t put on an oil and gas trade.
You’re late to the party. Fossil fuel consumption peaked in developed countries 20 years ago.
Without an increase in demand, the supply-and-demand imbalance will work itself out.
When this happens, many momentum traders will be left holding the bag.
We saw this happen in 2008, when oil spiked to $140 per barrel then fell back to $40 within six months.
The better trade lies in clean energy.
Solar Makes Sense
Clean energy is better for the environment, sure. But I’m looking purely at where the money is going.
We’re seeing countries band together to make a full transition to clean energy.
The U.N. has pledged to be net-zero by 2050.
For this to pan out, there will need to be $4 trillion invested in clean energy annually by the end of the decade.
That’s more than triple the current level.
A large chunk of this investment will be used to build out global solar capacity.
BloombergNEF expects global solar capacity to more than quadruple by the end of the decade.
From a cost standpoint, solar makes sense.
Solar panels are 90% cheaper than a decade ago. This has made solar cheaper than oil and gas plants in two-thirds of the world.
From a geopolitical standpoint, solar also makes sense.
Do you think we should depend on oil cartels for energy?
With what’s going on in Russia, many are waking up to this problem.
With solar, there’s no cartel controlling the supply of the sun.
Here’s an Easy Way to Trade the Solar Boom
To invest in solar stocks, you can buy the Invesco Solar ETF (NYSE: TAN).
Solar stocks peaked after the 2020 election and have pulled back 30% since.
(Source: Bloomberg.)
The market got ahead of itself when it was clear the new administration would be solar friendly.
When the frenzy wore off, solar stocks pulled back.
This gives you an opportunity to get in now at a lower entry price.
Regards,
Research Analyst, Strategic Fortunes
Morning Movers
From open till noon Eastern time.
Indonesia Energy Corp. Ltd. (NYSE: INDO) is an Indonesian oil and gas stock that is up 72%. The stock initially started climbing last week due to high oil prices as a result of the Ukraine-Russia war and then climbed further when retail investors got in on the action today.
Bed Bath & Beyond Inc. (Nasdaq: BBBY), the bedding and home furnishings retailer, is up 27% this morning. The stock jumped after GameStop chairman and co-founder of Chewy Ryan Cohen bought a big stake in the company and urged it to explore strategic alternatives, including a full sale of the business.
Oil States International Inc. (NYSE: OIS), is an American oil and gas company, gained 27% today. It is one of the many oil and gas stocks that is up as oil prices hit 13-year highs while the Ukraine-Russia war continues.
AdTheorent Holding Co. Inc. (Nasdaq: ADTH) provides a machine learning platform for advertisers and marketers. The stock is up 26% on a rebound after a minor sell-off last week following a price target cut from analysts at Needham.
Clover Health Investments Corp. (Nasdaq: CLOV) is a health care company that provides Medicare Advantage insurance plans. It is up 23% as part of a move in meme stocks today, with big moves in classic meme stocks like Bed Bath & Beyond.
AEye Inc. (Nasdaq: LIDR) develops lidar vision hardware, software and algorithms for autonomous vehicles. It is one of the electric vehicle stocks that is up 21% today as investors bet on an acceleration in EV adoption given the rising cost of gas.
Microvast Holdings Inc. (Nasdaq: MVST) designs, develops and manufactures battery systems for electric vehicles and energy storage systems. It is up 21% today partially because it is a meme stock and partially because it is an EV stock.
Nov Inc. (NYSE: NOV), an equipment and services provider for the oil and gas drilling industry, gained 19% today. This is another stock that is up as oil prices rise with no end in sight due to the sanctions on Russia.
Sunnova Energy International Inc. (NYSE: NOVA) is a residential solar power and battery solutions company. It is up 15% as investors turn to renewable energy stocks as a result of rising oil prices due to the potential ban of Russian oil.
Cornerstone Building Brands Inc. (NYSE: CNR) designs, manufactures and installs external building products for the commercial, residential and repair and remodel markets. The stock is up 13% on the news that it is being acquired by private equity firm Clayton Dubilier & Rice in a deal worth $5.8 billion.