Bearish hedge fund manager: “Nothing can save oil”
The oil industry is in a terminal decline, hedge fund manager James Jampel told Bloomberg on Friday, noting that the rise in oil stocks this year was “the biggest dead cat rebound in history.”
Jampel, who manages the hedge fund HITE Carbon Offset which aims to profit from decarbonization by “bypassing the losers of decarbonization”, is extremely bearish on oil, despite the 33% increase in the S&P energy index this year. year.
The oil industry will be the loser in the energy transition, says Jampel, whose $ 187 million hedge fund focuses on short selling the most overvalued and vulnerable stocks in the carbon value chain, such as producers, carriers, traders, processors and users of oil, natural gas and coal.
“Industries where the volume is decreasing, where demand is decreasing, have a hard time making money,” Jampel told Bloomberg in an interview released Friday.
According to the hedge fund manager, nothing can save oil as the energy transition will only accelerate from here thanks to improved technologies for alternative energy sources.
Although he is short on oil, Jampel is not long on renewables and renewable assets.
“The reason we’re not doing that is because this type of fund would be way, way too volatile,” the hedge fund manager told Bloomberg.
Jampel’s hedge fund is betting that the broad market will outperform the old energy.
This year, inflows into US large-cap energy funds surged as demand for oil began to recover and oil prices reflected that recovery. Last week, the Energy Select Sector SPDR ETF (NYSEARCA: XLE) recorded the fourth-highest inflow in US large-cap funds at $ 1 billion.
Shares of several US-based oil companies have provided returns above 100 percent so far this year, excluding dividends. The top five returns were Antero Resources Corporation with 206.6% share return year-to-date last week, Range Resources Corporation with 182.8%, Continental Resources with 157.5%, Magnolia Oil & Gas Corporation with 136.7% and PDC Energy with 114.6. %.
By Tsvetana Paraskova for OilUSD
More reads on Oil Octobers:
Read this article on OilPrice.com