Getting Out of Oil

I have a weakly held belief that the long-term for oil is up. The population of the Earth keeps growing, countries like China and India are emerging from poverty into a modern level of consumption, and the global need for energy will always go up, up, up.

That does not automatically mean that the two companies I hold (Enbridge and Pembina Pipeline) are two good companies that will benefit from this trend.

There is a 33%-50% risk of a recession in the next couple of years (2022 and 2023). And that has the possibility to suppress global demand for oil in the short term. Like the 2020 reaction to the pandemic shutdowns. In addition, companies and countries are now scrambling to bring more supply to the market. The President of the US is flying to the Middle East this weekend to beg for more oil.

So I might be wrong, but in the next 12 months, there is some uncertainty. There are safer places to invest money.

I sold my holdings of Pembina and Enbridge. Back to cash for now.