Energized

19 November 2021

This content is for professional investors only as defined by the MiFID.

During the past 70 years, the U.S. has become better at using less energy to produce more goods and services.

This trend is illustrated by energy intensity, as measured by the ratio of energy consumption to GDP, which has declined 63% since 1950. This increase in productivity could potentially help dampen the recent impact of higher oil and gas prices on the U.S. economy and corporate earnings. With technology helping drive increased domestic energy production, we believe, higher prices may even potentially support the economy by driving growth in capital expenditures by energy companies.

U.S. Energy Intensity

 

  • A lot has changed since the 1970s when the U.S. experienced an oil supply shock that drove significant inflation. Our new digital economy is less energy dependent and we believe data is the new oil. At the same time, automobiles, buildings and manufacturing have become more energy efficient.
  •  Energy, while being less of an input cost for companies, may even be more likely to support GDP growth as higher prices cause energy companies to potentially increase their capital expenditures to produce more. We believe, the increase in capital expenditure may exceed the extent to which higher energy prices limit consumption.
  • We don’t think investors need to be overly concerned with higher energy prices crimping the economy, but we do believe there is opportunity in growth-oriented technology providers to oil and gas companies to help optimize well drilling and other areas of upstream exploration and production. Additionally, as the price of solar or wind energy becomes cheaper relative to prices for oil and gas, higher hydrocarbon prices may help spur activity in alternative energy solutions, in our view.

 

Download Alger On The Money

Les sites du groupe
My bookmarks

Pins are saved using cookies. Deleting them from your browser will delete your preferences.

La Française Group provides access to the expertise of a number of asset management companies around the world. To provide you with the most relevant information, we have developed an interface to present the full range of products available for your investor profile and country of residence.
Please indicate your profile
1
Country
2
Language
3
Profile
Your country of residence
Your language
Your profile
<p class="new-disclaimer__legal-notice">Before consulting this website, for your protection and in your interest, please read the “<a href="en/legal-notice/" target="_blank">disclaimer</a>” and “<a href="en/regulatory-information/" target="_blank">current regulations</a>” carefully. This information explains certain legal and regulatory restrictions which apply to individual and professional investors according to local law. By accessing this site, in my non-professional or professional capacity, I acknowledge that I have read and accept the terms and conditions of use. Pursuant to the application of the European Markets in Financial Instruments Directive (“MiFID”), please state to which category of investor you belong&nbsp;:</p>
<p class="new-disclaimer__legal-notice">Before consulting this website, for your protection and in your interest, please read the “<a href="en/legal-notice/" target="_blank">disclaimer</a>” and “<a href="en/regulatory-information/" target="_blank">current regulations</a>” carefully. This information explains certain legal and regulatory restrictions which apply to individual and professional investors according to local law. By accessing this site, in my non-professional or professional capacity, I acknowledge that I have read and accept the terms and conditions of use. Pursuant to the application of the European Markets in Financial Instruments Directive (“MiFID”), please state to which category of investor you belong&nbsp;:</p>