Long smog

Smog is back baby!

You might have noticed that energy prices, particularly the out-of-fashion kind such as oil, have been going nutso. At pixel time, the black stuff is trading at $80 per barrel, meaning it’s up 55 per cent for the year, and trading at a three-year high. So much for Cathie Wood’s target price of $12 a barrel, eh? Australian thermal coal, meanwhile, is up 88 per cent, to $204 per tonne,

Apportioning blame for this bad energy bull market depends on your political persuasion, but one factor driving this — no matter its geopolitical importance — is that extracting fossil fuels has become increasingly unpopular. So what happens when supply goes down and green-fingered renewables can’t fill the void? Well . . . *gestures at everything*

One thing is clear though: it means it’s been a good time to own stocks that won’t save the world from itself. Here’s a monthly chart which we just chucked together, showing iShares’ Global Energy ETF versus its own Clean Energy ETF. 12.9 per cent outperformance over the past month alone. Talk about alpha!

FT Alphaville has little doubt that ESG investors’ hearts are in the right places. But, what’s that phrase again about good intentions again?

Related links:
Why Extinction Rebellion is wrong about BlackRock - FT Alphaville