Displaying items by tag: gas

Private equity’s long-standing infatuation with oil and gas appears to be cooling. In the first quarter of 2024, only five energy-focused funds reached final close, and notably, none raised over $1 billion—a stark departure from the sector’s 2014 heyday, when fundraising totals topped $78 billion globally. 

Today, traditional hydrocarbons are taking a back seat as investor interest pivots toward renewable energy and broader energy transition strategies. This shift reflects growing pressure from institutional investors and ESG-conscious stakeholders who are increasingly wary of fossil fuel exposure. 

The fundraising gap highlights more than just a cyclical downturn; it signals a structural change in capital priorities. With clean energy rising to the top of the private capital agenda, oil and gas funds may need to reinvent their value proposition—or risk being left behind.

Finsum: CNL Strategic Capital is focused on value creation so this might be a great opportunity to explore the latest trends in PE. 

Oil prices surged as much as 14% in their biggest intraday jump since 2022 after Israeli airstrikes hit Iranian military and nuclear targets, rattling global energy markets. Though prices later pulled back, Brent and WTI crude still ended up nearly 6% on the day, reflecting heightened investor anxiety over potential disruptions in Middle East supply. 

The attacks avoided Iran’s vital oil infrastructure—like Kharg Island and key pipelines—tempering fears of immediate output losses, but analysts warn that any escalation could still threaten flows through the Strait of Hormuz. 

About 20% of global oil transits that narrow waterway, making it a critical choke point vulnerable to retaliation or blockade. While Iran vowed a strong response, energy analysts say an all-out disruption would hurt Tehran too, particularly as it relies heavily on oil exports to China. 

Finsum: For now, traders are eyeing whether the conflict expands into an “energy-for-energy” tit-for-tat, which could turn market jitters into a full-blown supply crisis.

President-elect Trump has announced his intention to block new wind energy projects during his upcoming term, arguing that the industry relies heavily on subsidies to function. Known for his support of fossil fuels, Trump has appointed fracking executive Chris Wright as his Energy Secretary and emphasized policies favoring traditional energy sources. 

His opposition to wind power, which he has called unsightly and harmful to marine life, extends to plans for an immediate executive order to halt offshore wind production. Although renewable energy advocates predict that existing projects will continue despite the political shift, companies like RWE acknowledge potential delays in offshore wind timelines. 

Critics, including Sen. Ron Wyden, have warned that abandoning wind energy will raise electricity costs for families and reduce domestic energy output. Clean energy leaders stress the importance of a diversified energy strategy to meet the nation’s rising energy demands.

Finsum: These policy shifts are clearly going to affect market fundmentals over the next term, will there still be enough industry support to prop up ESG? To be determined.

Gasoline prices in the U.S. are projected to drop below $3 per gallon for the first time in over three years, offering relief to consumers grappling with inflation. Lower fuel costs are a positive sign for Vice President Kamala Harris and the Democrats as they head into the presidential election season.

 Analysts attribute the price decline to weaker fuel demand and falling oil prices, with national averages already decreasing from a year ago. Patrick De Haan from GasBuddy suggests prices will continue to fall as winter-grade fuels become available. 

Studies indicate that presidential approval ratings are often tied to gas prices, making this drop a potential boost for Harris’s campaign. However, global oil dynamics and events like Hurricane Francine could still impact prices.

Finsum: Inflation is still an ongoing issue heading into the election and gas prices are the center of the target.

China has firmly established itself as the third-largest gas market globally, trailing only the US and Russia, and surpassing the EU. As China’s gas demand grows, suppliers see it as increasingly significant compared to the declining European market. 

The EU’s dependency on foreign gas producers, with its push towards biogas and biomethane falling short, complicates its supply security. Despite EU's efforts, its domestic gas production continues to decline, increasing its reliance on imports, with spot LNG providing critical equilibrium between Asia and Europe. 

Europe faces high gas prices and volatility due to limited global production capacity and logistical constraints. Recent geopolitical events and sanctions, including Uniper’s termination of Russian gas contracts and the EU's 14th sanction package against Russia, further challenge Europe's gas supply dynamics.

Finsum: Natural gas will definitely see policy volatility due to the upcoming election, but for the meantime China is keeping demand high.