Q. Whats the current pricing within the energy markets telling us?
A. Undervaluation in growth components, over valuation in garch components and a mixed picture in midcap companies who have not staked out claims within growth sectors.
Capital formation is the markets supposed #1 goal.
Is it functioning according to its purpose?
Pretty hard to tell, as the influences of the really big interests financial and commodity (garchs aka oiligarchs,) are by weight, obfuscating prices through trading venues using derivatives across the disparate energy markets.
XOM recently headlined that they were losing thier shirts on NG.
Part of the answer about why is clear, XOM bought Gas by acquisitions of companies, who are not, the low cost producers on a forward basis.
The nucleated oil from shale revolution has made some oil drillers growth companies, market share gains from these new participants, was not on the garchs lists of likely / probable outcomes, as the certainty about oils scarcity was the primary meme.
The Garchs had created an inertia complex rooted in the fundamental projected belief and bullying of the Peak oil meme, that meme excluded innovation, hampered capital formations, resulting in the garchs complex surmise formed to the purpose of circular reference;
"Dont bother looking for more oil, because you wont find it, and even if you do, you wont be able to afford to lift it."
The prevailing metrics of the primary meme, Peak oil, have collapsed. The lagging effects of this collapse will take considerable time to be clear to the broad investor universe, due to the role of systems influencing trading by obfuscating prices, to benefit hierarchal unwinding of positions.
Prices remain artifacts of Prevailing Systems Intent.
So this Question: are market prices in the current sense reflecting the new reality?
Answer; No........
Low cost energy is on the horizon.......prices have a long way to fall, capital flows are now forced for the first time in decades....to consider growth. |
