Exxon just reported record profit of $56 Billions in 2022. Some investment professionals suggested to invest in oil and gas companies because of the excellent stock market performance and dividends. Some investment professionals venting about Biden Administration’s tough stance on Fossil Fuel industry.
I also kept reading news that oil demand is going to peak in 5 or 15 years. See below.
Strong case to believe oil demand will peak in the next decade
McKinsey: Oil Demand Peak Could Be Two To Five Years Away
Global oil demand to peak around 2040 or ‘much sooner,’ IMF says
Perhaps it depends on whether it is for long-term investment or short-term trading. Perhaps the day traders don’t care about the next decade at all.
Personally, I guessed whether it is time to be contrarian now. Did oil stock have its run already? XLE Energy Select Sector SPDR Fund ETF almost got a straight-line uptrend since the March 2020 pandemic recession slump. It was up around 70% since last year! Now it is around historic high as 2014. Is it now time to sell some and take profit? I don’t own any myself.
Also, it gets quite political or even personal when it comes to fossil fuel industry. It might not meet some investors’ value and believes or ESG investing.
This report shows how the biggest Canadian institutional investors voting record on climate commitments. AIMCo, RBC Global Asset Management, and Guardian Capital LP voted against all of the 14 Canadian proposals to fight climate change.
Perhaps there is a silver lining. Such high price of oil and gas and the invasion of Ukraine can drive transition to renewable energy and energy independence.