Energy Supply & Demand in Flux- Earnings: AQN, H, RNW, FC, AI
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The energy sector is becoming more diverse, at the same time as demand is increasing. Driving the diversity on the supply side is the need for solutions to climate change. Demand increases will come from economic growth.
Obsolescence for any specific energy source is unlikely; most all energy has some commercial value. Lying ahead is a realignment, depending on supply scarcity and increasing demand that together will reflect in prices. The energy transition is not self-financing, there are likely only more expensive alternatives. From post Global Financial Crisis to the COVID pandemic, energy prices had been falling. A change in this trend matters.
At the intersection of supply and demand is price, and oil is back in the spotlight. The recent rally into the mid $70's for WTI crude has caught many by surprise, what comes next for prices will be an indicator for predicting the cost of energy, inflation and interest rate risks ahead. This week's commentary looks at the energy landscape for possible outcomes.
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