The Energy Sector Goes on Sale

Source:

In spite of short-term corrections, the International Energy Agency predicts that by 2030, overall energy use will increase 55% from today's levels. And it's been estimated that $22 trillion of new infrastructure projects will be required in the same timeframe...

... it was hard to find an energy stock that wasn't going along with oil's ride. Alternative energy companies, oil service operations, even oil rig helicopter shuttle services rose, all on the thought that their products would ultimately help to produce more oil or reduce its consumption.

Good logic, to be sure, but only until something changes, either real or perceived. Of course the "change" was that people found ways to use less oil by driving fewer miles… 9.6 billion fewer in May from a year ago. Eureka. And once Wall Street processed this information, the "sell everything" mentality kicked in...

The Energy Sector Is Now For SaleNot only were oil drillers and oil service stocks hit, anything even remotely connected to the entire energy sector was sold off indiscriminately...

Don't believe it. While people are driving less, they're riding buses, trains or subways more. New York City subway ridership was up 6.5% in April over a year ago, indicating a change of habits. Similar changes are happening elsewhere in the United States.

That's more wear and tear on the infrastructure, and if even more people make the switch, more track will have to be laid, cars added, terminals built, etc. Translation: Infrastructure spending will increase anyway, it will just be for different "stuff."...

In spite of short-term corrections, the International Energy Agency predicts that by 2030, overall energy use will increase 55% from today's levels. And it's been estimated that $22 trillion of new infrastructure projects will be required in the same timeframe...

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe