After a hot first half of 2022, many commodity prices are down sharply and crude-oil prices are well off their highs. Recession fears are driving down prices as investors expect demand for raw materials will fall. That’s misguided and short-term thinking, as the energy transition will require a large increase in the mining of industrial metals such as copper and aluminum to power an electricity-based, carbon-free future.
Meanwhile, the world still needs to burn traditional fossil fuels during this transition. Those are the opinions of Kevin Holt, chief investment officer for U.S. value for Invesco who leads several mutual funds including the $9 billion Invesco Comstock
and Invesco Energy
funds. This transcript has been edited for length and clarity.
MarketWatch: Energy prices pulled back from their highs in the second half of this year, and commodities are falling. When it comes to traditional energy, what are people focusing on too much and what are they overlooking? Holt: People are so fixated on short-term demand trends, and they’re not focused on the inherent structural changes that appear to have taken hold in energy. Historically this industry h …