Despite the country’s newfound net energy exporter status, Axios reports today that the oil and gas industry’s stocks are tanking, citing investor worries over climate change and the image of the industry.
Energy stocks only represent 5% of the S&P 500, down from 15% in 1990. The report also points to the declining value of ExxonMobil stocks, which have performed far worse than the overall S&P since oil prices crashed in 2014. Energy jobs were also the only sectors to lose jobs on a national scale last year.
The industry has also attributed to its own declines, by producing more energy than there is demand for.
CNBC’s Jim Cramer received media attention recently for saying he was “done” with fossil fuels and linked them to the tobacco industry.
“That’s absolutely representative of what a lot of people are thinking in terms of investing,” Paul Sankey, an oil analyst, tells Axios.
He categorized the negative feedback against oil and gas companies and climate change as an accomplice, not the leader. That role lies with oversupply and a lack of momentum.
“The worse oil and gas stocks do, the less momentum they have, and the worse they keep doing,” Axios reports.
Chevron CEO Mike Wirth pushed back, telling CNBC that the hit to investments will eventually turn back.
“If tobacco use were ceased today, I think the world would be just fine,” Wirth says. “If we ceased use of all hydrocarbon products today, the world would not be fine, and I think that’s the reality.” Read the full story.
