Yahoo Finance Hedge fund manager: Electric cars could actually cause energy prices to spike
Commodities trading star Dwight Anderson, who runs the largest commodities-focused hedge fund, Ospraie Management, has a non-consensus view that the rise of electric vehicles could actually push crude oil prices higher over time.
Anderson, who previously worked for hedge fund legends Julian Robertson and Paul Tudor Jones, thinks the rise of electric vehicles is going to affect demand growth. The idea is that as electric vehicles gain more market share later this decade and early into the next decade, it will lead to much lower future oil and gas investment due to expected lower demand which will ultimately push crude prices higher.
“So that [electric vehicle] side is going to be something that is really going to affect demand growth in crude next decade, and I actually think it could have the odd effect of keeping crude oil prices higher for longer at the tail end of this decade into early next,” Anderson said in an interview with Alan Boyce on Real Vision Television — a subscription investing video service.
He continued: “Because the huge projects that have to be sanctioned that really change the supply and demand, the 100 to 500,000 barrels per day, are ultra deep, deep oil sands, Arctic, and they are many billions of dollars and many years’ lead time. So by the end of this decade, when the oil executives are taking a look and they’re going, ‘holy cow,’ and they’re starting to see electrical vehicles become more competitive outright economically, and start to gain share. And that that will affect the demand growth the middle of next decade.
“I think they might not sanction some of the large oil projects. The largest,the longest lead time, but also the biggest size and capacity, because of concerns over what pricing will be then. So I think the oddity, actually, is that, at the tail end of this decade to early next, the penetration rate of electrical vehicles I think could lead to higher crude prices, potentially, rather than lower, until that demand really catches up middle to late next decade.”
It’s a non-consensus view point. The traditional view is that electric vehicles will cause crude oil prices to slump.
Watch the full video at Real Vision.
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Julia La Roche is a finance reporter at Yahoo Finance.
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