~Beyond Petroleum~

Hey Influence Traders,

As I pointed out yesterday, there is a perfect storm brewing in the petroleum industry.

  • Petroleum companies are coming off a down year – prices are down

  • The new administration is already working to reduce supply

  • Infrastructure spending will drive demand

  • Green policy spending will drive demand

Petroleum Ripples Are Rising

Each of the above ripples are playing off the other to help drive the petroleum industry. Reduced supply plus increased demand can only take prices in one direction. UP!

While the whole sector should benefit not all petroleum companies are created equal.

I like companies that are well diversified, have a focus on green energy development (so they get a positive ESG rating) and have mastered exploration.

It’s All About the Slogan

The company I like traces its roots back to 1908 after geologists discovered a large oil deposit in southwest Iran.

That find changed the course of the Middle East and led to the formation of a petroleum company that has since gone Beyond Petroleum.

On the top of my list is BP (Ticker: BP), which has an integrated oil and natural gas portfolio and is committed to renewable energy sources.

It has, as it’s slogan says, gone beyond petroleum.

Like a lot of energy stocks, BP is undervalued, particularly after this past year of lockdowns and reduced global travel.

But that is expected to reverse moving into 2021 as vaccine rollouts help to lift restrictions and drive pent-up travel demands.

But BP has several competitive advantages over its peers:

  • Integrated and diversified global portfolio of drilling, production and distribution assets

  • Pre-pandemic revenue of more than $200 billion

  • Downstream revenue based on filling stations world-wide

  • Refinery and LNG (liquefied natural gas) capabilities

  • Recent additions of wind farm, carbon capture projects and EV charging station business lines

  • Large oil, gas and LNG trading units

In addition, BP’s strong commitment to renewables and emissions reduction gives ESG investors a good reason to invest.

Not only has BP announced that it wants to “invest in and build renewable energy capacity of 20 gigawatts by 2025 and 50 gigawatts by 2030," but it has plans for a network of ultra-fast electric vehicle chargers in Germany and Scotland.

There are multiple ripples amplifying the potential for the petroleum sector

BP, given its competitive advantages, is poised to ride that wave.

Cutting Through the Noise for You,

Frank


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