Today's Chart of the Day from Energy sector head Fernando Valle shows the breakdown of primary energy consumption separated by commodity type.
For those trying to time the peak in oil, you may want to rethink your strategy. What really matters in commodities is whether you can outlast your competitors and continue to generate free cash flow, whether Brent is $30 a barrel or $100.
Only two things matter in commodities over the long-term:
- Cost of supply – is your resource cheap enough to attract capital vs. alternatives
- Leverage – too little, and you lag peers in a capital-intensive industry, but too much, and you become a victim of the cycles.
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