Quote:
Originally Posted by cabmandone
I've been looking at energy ETF's and consumer staples ETF's but haven't really considered any individual stocks. I was thinking along the lines of what Jeremy mentioned regarding data center demand but haven't been able to zero in on any one particular stock.
Side note: Is Newegg (NEGG) a pump and dump? I haven't read much in the way of big news but it's way up over the last few days.
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I have a theory about what will (may) happen in energy market.
- Russia will build more gas pipelines to China, China will go from largest LNG buyer to not buying much LNG at all, global LNG market will be oversupplied.
- The lowest cost LNG producer is Qatar who will get most of the Asian market and do fine.
- Australian LNG producers will suffer.
- US LNG producers will benefit from EU commitments to buy lots and lots of US energy. Demand for US nat gas will be supported.
- Data center power demand will be another support for US nat gas. Especially with wind and solar projects being canceled, and nuclear a decade from producing significant new power.
- US NG price will go up. US gas production can be increased with more drilling, but pipeline capacity is a bottleneck. Not just pipelines from production to LNG terminals in TX/LA, but also pipelines from production to data center locations.
- Meanwhile, global oil market is oversupplied, Saudi not giving up share any more, and Russia leaning even heavier on oil sales, so oil price stays low and US oil producers will hold down drilling and production, which will limit increases in NG production.
- So . . . I think I want to own US NG names, upstream (producers) and midstream (pipelines). Possibilities include KMI OKE EQT CTRA AR.
- I think I want to cut my exposure to US oil names and to global oil, gas, LNG names.
- None of this feels likely to pay off anytime soon. More like over next year or two.
- I also think US electric rates will go up and up, partly from higher NG price but more from the investment needed to supply AI datacenters, which ordinary ratepayers will have to fund. I can’t really figure out a way to profit from that.