In today’s Exponential Investor…

  • Negative oil again?
  • The real forces behind the oil price
  • German autos? Buy or sell?

In today’s Exponential Investor podcast we discuss the possibility of seeing negative oil prices again.

In April as the coronavirus crunch hit the markets around the world, demand for oil fell off the proverbial cliff. Supply kept flowing and suddenly a whole bunch of futures contracts ready to expire needed to be offloaded.

As Kit puts it, people didn’t want to be taking delivery of barrels of oil at their office. This market anomaly, while theoretically possible, actually came true.

Can it happen again? Well perfect conditions would need to be met. It’s unlikely as you’d think investors would now be smart to the situation. But then again, no one realistically thought negative prices would ensue in the first place… and they did.

However, the real story here, Kit suggests, is the bigger picture of the energy transition and the demand and supply forces that a world of electric vehicles (EVs) will push and pull from the market.

Is this world of EVs something that in the short term we can expect? What are the forces that have injected critical change to this industry in the short term? Also, if you push the boat out, and look at the bigger picture, what does it mean if you’re looking to build a portfolio and invest in companies that could deliver real value that perhaps right now are a little “on the nose”?

We discuss all this and ponder what you’d do if Germany offered you a free Renault Zoe…


You can listen to this week’s podcast here.

 

Regards,

Sam Volkering and Kit Winder
Exponential Investor