Long/short opportunities in the global energy sector

Presented by

Jacob Mitchell, Chief Investment Officer, Antipodes Partners

About this talk

Rapid growth in US natural gas production was underwritten by high yield debt markets which are now generally shut. As the gas price fell to record lows, production growth transitioned to associated gas from booming oil shale. Subsequent to the oil price shock, new associated gas development has collapsed. The industry has reached the stabilisation phase where production declines are now set to accelerate whilst demand growth is underwritten by US power generation and exports. We have positioned our investment portfolios to benefit from a strong rebound in the US natural gas price to around $4.50/MMBtu, the cost of marginal supply, a rare case of a commodity price outcome largely not dependent on Chinese demand.

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Antipodes Partners is a pragmatic value manager of global and Asian equities (long only and long-short). We aspire to grow client wealth ahead of the broad market over the investment cycle without subjecting capital to undue levels of risk. We take advantage of the market’s tendency for irrational extrapolation around changes in the operating environment, identify great businesses that are not valued as such and build high conviction portfolios.