Resource Stocks and Global Energy Demand: Key Insights

Current Global Energy Demand Trends

Record energy demand in 2023 is expected to continue, influenced by policies supporting net zero emissions and affecting energy consumption and mix. Increasing demand in large economies and the balance of global supply and demand highlight the importance of energy security, affordability, and availability.

"We saw record demand in 2023 and expect another record this year. At the same time, we're constantly monitoring trends and signpost in the global markets and we're prepared to adjust and evolve just as we have for the past 140 years. As I said earlier, our core capabilities are critical to meeting society's needs at any point in energy transition, no matter how fast it proceeds or what form it takes." --- (XOM, event transcript, 2024/05/29)

"These policies and programs, some of which support the global net zero emissions ambitions of the Paris Agreement, can change the amount of energy consumed, the rate of energy-demand growth, the energy mix, and the relative economics of one fuel versus another." --- (CVX, sec filing, 2024/Q1)

"Energy demand models are forward-looking by nature and aim to replicate system dynamics of the global energy system, requiring simplifications." --- (XOM, sec filing, 2024/Q1)

"It's an economy that is large and demand continues to go up. That said, the policy environment has been one that is geared towards reducing investment in traditional energy, encouraging investments in these lower-carbon energies." --- (CVX, earning call, 2024/Q1)

"Energy security is very important, so is affordability and availability. Prices at the pump are determined by the balance of supply and demand globally, not just one supplier. ExxonMobil is doing our part to efficiently supply the market." --- (XOM, event transcript, 2024/05/29)

Geopolitical Influences on Energy Demand

Geopolitical factors, including energy security concerns and conflicts like those in the Middle East and Ukraine, significantly influence global energy demand. Companies like SLB, XOM, and HAL highlight the importance of energy security and geopolitical stability in driving market dynamics and long-term demand growth.

"In particular, we anticipate the activity momentum in the international markets to continue, driven by increasing global demand and an even deeper focus on energy security." --- (SLB, earning call, 2024/Q1)

"The deal strengthens American's energy security by bringing the best technologies, operational excellence and financial capability to an important source of domestic supply." --- (XOM, event transcript, 2024/05/29)

"We believe long term demand growth will be driven by economic expansion, energy security concerns, and population growth." --- (HAL, sec filing, 2024/Q1)

"We are in the midst of a unique oil and gas cycle, characterized by strong market fundamentals, growing demand, and an even deeper focus on energy security." --- (SLB, earning call, 2024/Q1)

"While easing inflationary pressures have reduced macroeconomic uncertainty, geopolitical unrest in the Middle East and the Russia-Ukraine conflict continue to be major sources of volatility for the oil and natural gas markets." --- (HAL, sec filing, 2024/Q1)

Energy Sector Supply Chain Dynamics

Energy sector supply chain dynamics focus on leveraging scale for efficient logistics, optimizing supply chains, reducing operating costs, and enhancing capital efficiency through technological advancements and process changes. Key players like ExxonMobil, Schlumberger, and Halliburton emphasize these strategies to improve equipment movement, accelerate product cycles, and respond to market opportunities.

"That's all about logistics and how can we leverage our scale to drive more efficient logistics, how can we leverage our scale to drive more effective supply chain, including utilizing more effective procurement." --- (XOM, earning call, 2024/Q1)

"Again, it comes from operating cost reductions, supply chain optimization, G and A savings." --- (SLB, M&A Announcement, 2024/04/02)

"- Capital efficiency : Maintain our capital expenditures at approximately 6% of revenue while focusing on technological advancements and process changes that reduce our manufacturing and maintenance costs and improve how we move equipment and respond to market opportunities." --- (HAL, sec filing, 2024/Q1)

"safety, reliability, GHG emissions intensity and cost and capital efficiency.2nd, essential partner, creating value through win win solutions for our customers, partners and broader stakeholders, including communities in which we operate." --- (XOM, event transcript, 2024/05/29)

"into securing the best capital efficiency, as I highlighted, look for integration to accelerate the product cycle to get faster to first oil, first gas." --- (SLB, earning call, 2024/Q1)

Investment Opportunities in Resource Stocks

Investments in advanced recycling, attractive new assets from acquisitions, rising production investments, and strategic capital management highlight significant opportunities in resource stocks. Companies like ExxonMobil, Chevron, and Schlumberger are positioning themselves for long-term growth, making them attractive for capital investment.

"investments we're making to expand advanced recycling capacity around the world, taking difficult to recycle plastic waste and breaking it down at a molecular level to convert it into valuable raw materials.It overlooks our advocacy efforts in support of recycling and waste management and the collection systems needed to enable circularity on a larger scale." --- (XOM, event transcript, 2024/05/29)

"We did say that upon the closure of the Hess transaction, we're going to add some assets that are going to be highly attractive for capital investment." --- (CVX, earning call, 2024/Q1)

"So we believe that time is right. For the coming years, the coming decades, the investment in production will continue to rise, and we believe that being the partner of choice, having the most comprehensive portfolio, both in the U. S.And internationally, will equip us to prolong the cycle and to be successful with our shareholders." --- (SLB, M&A Announcement, 2024/04/02)

"• We paid $151 million of dividends to our shareholders. Future sources and uses of cash We manufacture most of our own equipment, which provides us with some flexibility to increase or decrease our capital expenditures based on market conditions." --- (HAL, sec filing, 2024/Q1)

"Invest in advantaged opportunities to drive long term earnings and cash flow growth, maintain a strong balance sheet and reward shareholders by consistently returning capital to them." --- (XOM, event transcript, 2024/05/29)

Renewable Energy Adoption Rates

Tesla's 100% renewable Supercharger network and 125% increase in energy storage deployment, NextEra's emphasis on low-cost, fast-deploy renewables, Enphase's advanced tools for solar adoption, and major tech companies' commitment to carbon-free energy all highlight significant strides in renewable energy adoption rates.

"A Model 3 RWD lease in US now starts at $160/month after probable gas savings - With FSD Supervised enabled, the chance of an accident is around 5x lower compared to the US average in 2023 - Our Supercharger network was 100% renewable in 2023 (achieved through combination of onsite resources & annual renewable matching) - To further EV adoption, we’re opening our network to other EVs across the world - We deployed a total of 14.7GWh of energy storage last year (125% increase compared to 2022)" --- (TSLA, Twitter post, 2024/04/22)

"Low cost, fast to deploy renewables help keep power prices down, making our economy more competitive globally. Ultimately, our country needs all forms of energy as we move forward and the future has never been brighter for the power generation sector as a whole and renewables in particular." --- (NEE, earning call, 2024/Q2)

"By equipping installers with cutting-edge tools and resources, Enphase continues to spearhead solar adoption, enabling customers to fully leverage the advantages of renewable energy. Enphase's software leverages artificial intelligence and machine learning to manage the complexity of electricity rate structures to significantly improve value for homeowners." --- (ENPH, press release, 2024/05/30)

"According to McKinsey, U.S. data center power consumption is expected to reach 35 gigawatts annually by 2030, and much of this growth is supplied by renewable energy given that hyperscalers like Apple, Google, Meta and Microsoft are committed to 24/7 use of carbon-free energy." --- (FSLR, earning call, 2024/Q1)

"Energy Generation and Storage Segment Energy generation and storage revenue increased $106 million, or 7%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023." --- (TSLA, sec filing, 2024/Q1)