Mining, Resources & Energy Articles

Here’s a shocking stat for energy investors: the energy sector comprises only 3% of the S&P 500’s value, down from 30% in 1980. That’s serious underperformance. It’s understandable why only the most ardent of energy bulls currently own what remains of the energy sector’s once great market cap. But we all know Warren Buffet’s famous quote about buying when others are fearful. Could it be that this is one of those moments for the energy sector? Will it rise like a phoenix from the ashes at the very moment it’s been written off and ignored by most investors?

You’ll have noticed that Trump’s presidency has started with Change with a capital C. He’s breaking laws, circumventing Congress, and encouraging Elon Musk to dismantle government departments. Most legal scholars agree the US is in a constitutional crisis. Amidst the chaos, Trump announced he’s introducing a Sovereign Wealth Fund. The idea has been mooted for some time so this wasn’t a surprise, but it may mean more to investors that is apparent at this juncture…

As the transition towards net zero gathers pace, the energy sector has found itself in the midst of generational shift. Investment into sustainable energy sources has structurally increased, whilst fossil fuel investment has faced ESG-driven investment headwinds which has led to constrained oil exploration budgets.

Uranium is a commodity which tends to inspire impassioned debate amongst investors and the population at large. Some remember Chernobyl and Fukushima and retain a blanket negativity toward nuclear energy and uranium as a result.

The Intergovernmental Panel on Climate Change (IPCC), which is leading the global scientific assessment of climate change, estimates that human activities have already caused around 1°C of global warming above pre-industrial levels. If global warming continues at the current rate, the IPCC estimates it will reach 1.5°C above pre-industrial levels between 2030 and 2052.