This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

IBM and Your Changing Energy World

Natural gas prices may remain at their present $4/mcf levels for 20 years, according to a recent IHS study, as an abundance of gas in North America powers the economy forward.

Demand, meanwhile, is not growing as fast as it once did. U.S. electricity demand is rising less than 1% per year, according to the Energy Information Agency, thanks to the cheapest form of renewable energy -- efficiency. Insulation, light emitting diodes (LEDs), more efficient electric motors in appliances and industry are all playing their part.

In other words, we are approaching an era of energy abundance, with supplies overtaking demand on several fronts, all at once. Anyone who is building a portfolio based on an assumption of high, rising energy prices, in my view, is making a mistake.

In this new energy world, the costs for all energy production are going to matter. The highest-cost supplies are going to be priced out of the market.

I don't think many portfolios are prepared for this. If natural gas remains at $4 per mcf, why should oil remain over $100 per barrel indefinitely? If renewable energy costs are continuing to decline, doesn't that mean oil companies have to look at the costs of development, not just at their proven reserves but the price of extraction?

What's happening in the energy market is not a secret to IBM. It's not a secret to the Department of Energy. Don't let it be a secret to you.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
IBM $144.17 -0.76%
AAPL $95.18 1.60%
FB $117.44 -0.95%
GOOG $692.33 -0.84%
TSLA $232.12 -4.00%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs