"A natural hedge for all the mayhem"

By Ed D'Agostino | September 20, 2024

Today, we’re continuing our energy series with Jan Stuart, who last joined us on Global Macro Update over a year ago.

I’ve been eager to speak with Jan again for months, especially since we added two US oil and gas producers to the Macro Advantage portfolio. Jan, as you might recall, is a global energy economist at Piper Sandler. Prior to that, he led macro energy research at UBS and Credit Suisse.

Many analysts are pointing to China’s economic woes as a root cause behind the slump in oil prices. But Jan sees softer oil demand stemming from weakening economies in Europe and the US, too. Here’s Jan:

What's happening is that demand growth… it's decelerating very fast. … In the data through July, in the case of China through August, the data tell you that there is something going very, very wrong in China. That things are not growing, are in an industrial recession for now, going on year number three across Europe. And that increasingly here in America, things are getting softer on the oil demand front.

Will oil prices recover anytime soon? And what role should oil and gas stocks play in your portfolio? You’ll hear Jan’s take in our interview (hint: they’re “a natural hedge for all the mayhem”), along with his thoughts on nuclear energy, and the influence of large emerging markets like India on energy demand.

Notably, Jan is less concerned about a geopolitically driven supply shock than other analysts I’ve spoken to. We also cover China’s “giant Achilles heel,” the role of efficiency gains on oil and gas demand, and why Jan thinks the Fed’s recent rate cut came 12 months too late.

Watch my interview with Jan Stuart by clicking the image above. A full transcript of our conversation is available here.

Thanks for reading and watching.

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