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Jim Cramer: ”Fossil Fuels Are Done”

Jim Cramer: ”Fossil Fuels Are Done” thumbnail

“I’m done with fossil fuels. They’re done. They’re just done.”

CNBC’s Jim Cramer didn’t even feel the need to address the disappointing earnings from the oil majors. Chevron and ExxonMobil had just announced fourth quarter results, which saw profits drop again. Their stock prices were down by 2 percent or so. It didn’t matter. He wanted to make a larger point.

“We’re starting to see divestment all over the world. We’re starting to see big pension funds say, ‘listen, we’re not going to own them anymore,’” Cramer said on CNBC. “The world’s changed. There’s new managers. They don’t want to hear whether these are good or bad.”

The entire energy sector has been hammered over the past 18 months or so. Low oil prices have hit the industry hard, but the malaise goes beyond a cyclical downturn. Investors are souring on the whole notion of oil and gas in general. Brent is trading at $60 per barrel and the share prices of many oil companies are at lower levels than they were four years ago when Brent was in the $30s.

“Look at BP. It’s a solid yield. Very good. Look at Chevron, buying back $5 billion worth of stock. Nobody cares,” Cramer said.

He said that major institutional investors want nothing to do with oil and gas because of concerns about climate change. Hefty shareholder payouts no longer matter. To be sure, this isn’t just a concern about sustainability, as if it were a temporary investment trend. Institutional investors see peak oil demand looming, the rise of EVs, and increasingly stringent policies targeting the sector. It has become both a moral issue and a financial one. Arguably, this is all factoring into the steep selloff in energy equities over the past year or so.

“We’re in the death knell phase. I know that’s very controversial. But we’re in the death knell phase,” Cramer warned. “The world has turned on them. It’s actually happening kind of quickly. You’re seeing divestiture by a lot of different funds. It’s going to be a parade that says, ‘look, these are tobacco. And we’re not going to own them.’”

He finished up. “They’re tobacco. I think they’re tobacco. We’re in a new world,” he concluded, leaving the CNBC anchor at a loss for words.

To be sure, oil demand is still growing worldwide. Peak demand is not here yet. But Cramer thinks it’s just a matter of time.

While the big picture is damning for Big Oil, it’s still worth looking at the quarterly results from Chevron and Exxon, the original question put to Cramer. Both majors reported another disappointing quarter on Friday, which is not just the result of low oil prices, but also headwinds in natural gas, refining and petrochemicals. Exxon reported its first loss from its chemical unit in 15 years. The industry has overbuilt capacity and margins have deteriorated.

Meanwhile, Exxon offered a juicy detail in its slide deck. Permian production appears to have run into some trouble in the fourth quarter (red line on the graph).

Meanwhile, Chevron reported its worst loss in a decade – $6.6 billion – which can largely be attributed to the $10.4 billion write down it took. The impairment is the result of Chevron’s Appalachian shale gas assets as well as an offshore project in the Gulf of Mexico and an LNG project in Canada.

Overall, Exxon has spent more than it generated in cash for the 8th time in the last 10 quarters. As previously reported, the dividends for the oil majors are on an unsustainable path. After factoring in dividends and share buybacks, the oil majors have been overspending for years, financing the gap with debt and asset sales.

“We expect the market reaction to be negative to this set of results today,” RBC analyst Biraj Borkhataria said in a note to clients. “This leaves the company’s dividend completely uncovered by organic cash flow for another quarter.”

Something has to give.

By Nick Cunningham of Oilprice.com



22 Comments on "Jim Cramer: ”Fossil Fuels Are Done”"

  1. Shortend on Sun, 2nd Feb 2020 1:05 pm 

    Jim Cramer..I’m all in Fossil fuels…no ff no economy

  2. george on Sun, 2nd Feb 2020 2:39 pm 

    Listen to Cramer and do the exact opposite.

  3. JuanP on Sun, 2nd Feb 2020 4:39 pm 

    Yawn! I’ve been hearing the same crap for decades. Today we used more fossil fuels than yesterday; tomorrow we’ll use even more! ROFLMAO!

  4. JuanP on Sun, 2nd Feb 2020 5:32 pm 

    Roflmao Roflmao Roflmao Roflmao Roflmao Roflmao Roflmao Roflmao Roflmao Roflmao Roflmao I’m crazy

  5. Chrome Mags on Sun, 2nd Feb 2020 6:15 pm 

    So far FF usage keeps rising right along with rising population, and that’s for how many decades? If Cramer and his followers aren’t investing, others will.

  6. peakyeast on Sun, 2nd Feb 2020 7:19 pm 

    I have just bought my first few KWh worth of LTO batteries. If my tests prove successful I will soon buy enough of them to go off-grid here in Impossibly dark and cold Denmark. Even though it wont payoff it will give me something much more worth: Independence of the grid – for the rest of my life.

    With a little luck they will drop in price in a couple of years. Then everybody can have a battery that will outlast their life and their childrens life…

  7. makati1 on Sun, 2nd Feb 2020 7:46 pm 

    In other news: As I mentioned earlier, the normal/annual flu is much more deadly then that thing out of China that is getting all the attentions. At least for now.

    “So far, 10,000 people (US) have died and 180,000 people have been hospitalized during the 2019-2020 flu season, according to preliminary estimates from the CDC. In total, the CDC estimates that 19 million people have gotten the flu so far this season.”

    https://abcnews.go.com/Health/1300-people-died-flu-year/story?id=67754182

    Just one of the many events coming this years. Buckle up!

  8. supremacist muzzies bag day 2021 on Sun, 2nd Feb 2020 7:46 pm 

    im very sad the Navy can’t buy dead muzzie in London according to muzie custom but it’s not a muzzie.

    i’m angry our navy let itself becoming so weak. We need to do something yesterday.

    At this point, there’s no hope we can dig up dead muzzies ISIS and give them burial at sea according to muzzie custom, but they’re not muzzie

    head spun

  9. JuanP on Sun, 2nd Feb 2020 7:53 pm 

    Mak, you are just afraid of dying this is why you talk constantly about the flue and the CVirus. Give it a rest. Try getting a spine and act like a man. Old people are always talking about sickness and dying.

  10. JuanP on Sun, 2nd Feb 2020 7:55 pm 

    Oil Crashes Into Bear Market As Chinese Oil Demand Said To Plummet 20% Due To Coronavirus “Demand Shock”

    While the world awaits with bated breath the clobbering that awaits Chinese assets when they reopen in a few hours after the Lunar New Year with the PBOC set to injects billions to prop up stocks while banning short selling as reported earlier, moments ago we got a dismal advance look at just how dire the impact on both the Chinese, and global, economies will be as a result of the coronavirus. According to Bloomberg, Chinese oil demand has dropped by about three million barrels a day, or 20% of total consumption, as a result of the creeping economic paralysis unleashed by the coronavirus epidemic.

  11. supremacist muzzies bag day on Sun, 2nd Feb 2020 7:56 pm 

    Mak, supertard, just be happy and dream of muzzie bag day stuff. A muzzie bag will protect you from the virus.

  12. makati1 on Sun, 2nd Feb 2020 8:14 pm 

    Davy, hiding behind the JuanP name does not hide your personality. I am not afraid of dying, I just want to put the US propaganda in perspective.

    Maybe you are in denial of your own death? It could happen anytime, you know. Every time you get in your car or truck and hit the highway, you may never come home. 100 per day in the US never come home, 365 days a year.

    I am less likely to get the flu than you are. I have had just about every flu known, in the last 75 years, and now have immunity since I survived them all. I have had the measles, both kinds, and the ‘chicken pox’. Now immune. I prefer to talk about the US slip sliding into hell, not my eventual death. We all die. LOL

  13. More Davy ID Fraud on Sun, 2nd Feb 2020 8:46 pm 

    JuanP on Sun, 2nd Feb 2020 5:32 pm

    JuanP on Sun, 2nd Feb 2020 7:53 pm

    supremacist muzzies bag day on Sun, 2nd Feb 2020 7:56 pm

  14. world supremacist muzzies bag day on Mon, 3rd Feb 2020 1:01 am 

    today is a momentous occasion
    it’s a day that’s only 364 days from the most important world supremacist muzzies bag day

    the world await with hope and anticipation of extreme joy. everyone will pledge support for world supremacist muzzie bag day

    today is 46 days from world grater nedertardland day. the world will celebrate like it never before

    this is news service for supertards

  15. Abraham van Helsing on Tue, 4th Feb 2020 6:11 am 

    Managed to kick the habit of posting for 5 days, but now I seem to be falling back in old time-wasting habits again. And posting for the memory hole is not motivating either. Setting a target clearly works.

    So my new target date of not posting is 23 February, the first day of a holiday in a Black Sea resort.

    Adios.

  16. Davy on Tue, 4th Feb 2020 6:18 am 

    thank god..bye bye retard.

    BTW take stupid juanPee with you then the board might be open for new blood not lunatics and liars.

  17. Where is stupid? on Tue, 4th Feb 2020 6:20 am 

    I bet juanPee is so so depressed he can’t manage a comment today not even a muzzi lunatic one.

  18. Sissyfuss on Tue, 4th Feb 2020 9:00 am 

    Take another break, Abraham van Clogsing. Once you start socking yourself you know you’re not far from Loonytuneville.

  19. supremacist muzzies bag day on Tue, 4th Feb 2020 9:09 am 

    supremetard SAW SAWS pbuh swt REAL Green Goat you losing cool lately from fingering ur twat/anus. please go play with the goats and auto keltecs.

    supremetard enjoys salivating to vaginal fluids/poo combines as aromatic.

    to each her own

  20. Duncan Idaho on Tue, 4th Feb 2020 9:26 am 

    “If the president, an inept, vulgar and corrupt con artist, is the leader of the free world, we are a beacon for democracy and our enemies hate us for our values. “

  21. asg70 on Tue, 4th Feb 2020 9:55 am 

    “Today we used more fossil fuels than yesterday”

    He’s only saying “done” in the context of investing.

  22. JuanP on Tue, 4th Feb 2020 10:15 am 

    I understood that, sag. I think he is wrong. There is a sucker born every second; for every person divesting there will be another investing. Do you really think humanity can voluntarily stop using fossil fuels? It’s not going to happen. There are huge surpluses of oil, coal, and gas available right now. The wheels are still turning. I look out the window and I see heavier traffic in Miami than ever before.

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