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in the U.S. last year. That’s around 2% of the total U.S. vehicle sales. Said another way, electric vehicle sales would need to grow 500% to 1,000% next year alone to put a real dent in oil demand. I’m sure they’ll grow that much eventually . But it’s not happening anytime soon.
U.S. Crude Oil Oil prices are bouncing back from recent lows
Source: Bloomberg
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The reality is this... Oil sentiment is darn negative. Prices are depressed. And the energy sector is facing problems, both in the short term (COVID-19) and the long term (electric vehicles and renewable energy). But if you’re making an intermediate bet... over the next two to three years... then you can land in the sweet spot… buying cheap, when no one believes, and selling before the long-term tailwinds really take over. Cactus was right – this is the worst energy bust of our lifetimes. And today’s oil upside potential could be even larger than what we’ve seen in the past. To me, this is the biggest contrarian bet you can make today. If you’ve got the guts to make the trade, it could lead to massive upside from here.
Pull quote. Pull quote. Pull quote. Pull quote. Pull quote. Pull quote. Pull quote. Pull quote. led to 30%-plus rallies over two years. And the largest rally was more than 120%. No one really believes that a double in oil prices is possible today. After all, COVID-19 continues to run rampant. With fewer folks driving cars and catching flights as restrictions and shutdowns continue, demand for oil is down dramatically. But COVID-19 is temporary... We already have two prime vaccine candidates authorized for emergency use. The data isn’t complete, but it’s hugely positive. And given the trajectory we’re on, life could be just about back to normal by this time next year. That means the short-term pressure on oil could be mostly gone. And the long-term negatives? Well, they’re incredibly long term. In the long term, battery technology and clean energy will hurt the oil industry. But that’s a next-decade trend, not a next-year trend. Electric vehicle sales were around 350,000
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