Energy Has Something Left In The Tank

Energy hedge funds, take notice: You may never have it this good again, but you’ve got another couple of years to ride the remarkable energy bull market. That’s $120 worth of advice from a new book by the founders of the Energy Hedge Fund Center, Energy and Environmental Hedge Funds: The New Investment Paradigm, which retails for about 56 cents per page. According to Peter Fusaro and Gary Vasey, a lack of sustained investment in energy exploration and infrastructure over the past two decades has created a once-in-several-lifetimes boom in energy price. “It is different this time,” they write, and will continue to be so for at least another two years. Add the Enron collapse and its ancillary effects, which dumped “trading talent on the street and created a vacuum in the energy markets” for hedge funds to exploit, and you’ve got a remarkable confluence of opportunity, which the authors walk their well-heeled readers through. One argument the authors dismiss is the so-called “end of oil” crisis, in spite of the fact that, as they write, “The world consumes four barrels of oil for every one barrel that is added through exploration activities.” According to their analysis, “in two years we will have more than ample supply,” which will hardly quell the doom-and-gloom cries, but which certainly could help you make a bundle.