Podcast #24: Mark Gordon - Oil Fund

L2 Capital

In today's episode, Marcelo López spoke with Mark Gordon, CIO of the Ascent Oil Fund. Before taking his current position, Mark worked for companies such as Goldman Sachs, Soros Fund Management and Janus Henderson, where he focused on investments linked to the energy sector.

Mark explains that the Ascent Oil Fund was formed under the view that there will be a migration in the oil market’s perception from abundance to scarcity, which will cause shares of companies in the sector to rise substantially.

In the context of recent tensions involving the US and Iran, Gordon explains how conflicts in the Middle East may or may not impact oil prices, depending on the factors involved.

From a historical perspective, Mark discusses the role that perception and sentiment, regarding oil scarcity or abundance, plays on prices and market performance. He also lists the reasons why he believes we are in a transition period in regards to this sentiment.

Gordon still contrasts the inventory and sentiment factors from the point of view of their influence on the price of the commodity and its related assets.

Mark talks about shale companies, highlighting the operational and financial aspects compared to conventional oil companies, their advantages and also points criticised by analysts. After that he puts forward his expectations for the industry.

On the recent performance of oil and gas stocks, Gordon provides insights into the possible reasons for the poor performance of securities, especially the E&P ones, even amid higher oil prices.

Mark brings a totally unexpected perspective on the impact that electric vehicles have on the oil sector and the consequences he sees on the development of the EV industry.

Finally, Gordon talks about how he is investing to capture what he believes to be a turnaround in the oil and gas industry, highlighting the types of companies he is fond of in the current scenario and the ones he believes should benefit from the change in sentiment, from abundance to scarcity.