Global energy demand has been rising … well before the Russian invasion of Ukraine … with supplies failing to keep pace with demand.   Supply side shortages have been largely related to a lack of investment.

The public, feeling pent-up by pandemic restrictions … now being lifted … are likely to push strong demand for oil into the summer and fall.   Prices at the pump are currently projected to move from ~$4/gal to ~$6/gal.   At that level, discretionary spending is likely to decline … cutting into corporate profits … elevating recessionary risks. For a pure-play in oil, Cenovus Energy (CVE) … an integrated oil and natural gas company just exited its oil hedges on market strength, has a strong balance sheet and has plenty of liquidity.

On the natural gas (NG) front, the US (and Canada) can extract cheap NG … meet domestic needs, convert a portion to LNG and export to Europe.   Here, EQT Corporation, the largest US gas producer, is probably the best long-term investment.