Oil gets back above $50/b, after troughing at $37 in 2/09 and $35 in 12/08. Commodities in general appear to have troughed and are heading up (or at least sideways). The market thinks demand has bottomed.
FAN (wind ETF) has been in a $9-14 range the last 5 months, down from a high of $31 in 2008. It hit $9.03 last November, and $8.60 earlier this month.
TAN (solar ETF), after hitting $30 last year, has been even weaker, hitting $5.40 last November, and $4.65 earlier this month.
On the way down, when oil hit $80, announcements for new projects dried up, for the most expensive alt-energy projects (Alberta's oil sands). Below $60, no new projects were announced (for oil sands, solar, wind, etc.), and infrastructure being built started to be delayed and cancelled. Below $50, the whole alt-energy buildout was at a dead stop. Only projects already being built, with financing already guaranteed, continues to be built. On the way back up, with all the new government incentives, I expect demand for wind and solar to come back strongly, once oil gets back into the $60-80 range (and I expect to see that this year, even if the recession continues into 2010).
disclosure: I have been accumulating FAN at $12 and down, AMAT at $17 and down. |
