The coming Energy Crisis and how to play it

Great read from Greed & Fear and what they call the Oil crisis.

We have had the view that we have an ENERGY CRISIS coming due to the new drive to be carbon neutral which although ultimately its an important cause its unrealistic in the time frame and will lead to an energy crisis.

For us this is why we have had a long standing positions in Uranium and mid cap oil names.

Uranium is the only viable clean energy source. The old narrative of Nuclear being dirty and dangerous (which in reality is incorrect) is changing as we see a nuclear renaissance as the world strives to be carbon neutral.

Our favourite play is CCJ US. You can also play it through the URA US,KAP LI,YCA LN

We are +65.6% on the trade to date but we feel it’s just the beginning.
Uranium names can go 2-3X from here.

The other obvious way to play the oil/energy crisis theme is through oil names.
Fossil fuels still account for 84% of world energy demand at a time when demand is likely to surge and it will harder than ever for the normal supply function to respond.

So an allocation to mid cap oil names is essential as they will benefit from the surge in oil prices and from the majors being forced to shed assets.
Our current longs are REP/CNE/HBR
and we would look to add TLW and GKP LN.

We will also be adding a basket of offshore names. Is there a more hated sector? Capital expenditure has absolutely collapsed and the entire sector is down some 90%. This while the world still gets over 30% of its oil from offshore sources and oil consumption itself continues to grow. We can’t think of another sector so primed to make a comeback. Basket to include CCG/FTI/TDW/SUBC/SPMI/RIG/HLX

Our final way to play the theme is through Russian oil and Gas.

There is a unique opportunity as we have amazing supply destruction, a denial from the market of future energy needs, and the virtue signalling abandonment of fossil fuels led by Western oil companies.

We will be buying Lukoil & Tatneft.