Lasting Energy Chokeholds Present Buy Opportunities Across Sector

session. And shift four is up 7.5%. Do you want to shift gears here and take a closer look at the energy sector? Bring Sam back into the conversation and welcome in our next guest. Joining us, Rob Thummel, the senior portfolio manager at Tortoise Capital. Rob, great to have you back on the show. Let's start a big picture here. How much has this prolonged conflict with Iran fundamentally changed the global energy market? Yeah, I think it's had a huge impact, right? I think what the world's figured out is that energy is pretty important. Energy security is pretty important. And specifically even maybe a little bit more specifically is that we have actually seen inventories deplete for crude oil for refined products, gasoline, diesel and jet fuel. And so all of those need to be refilled. And so as a result of that, you've got some pretty wide margins now refining margins basically that are being captured by by some, but not all refiners. And Rob, I'm just wondering, you know, record high crack spreads, how that has been factoring in or changing the investment thesis. I mean, do you go all downstream now and sort of try to capitalize on that refining with the higher prices, or do you stay stay upstream with the oil majors and stay diversified? Yeah. For us here at tortoise, we made that switch, Sam, back in February when actually when Maduro was captured, we we saw Venezuela as an opportunity for more heavy oil to come to the US, which meant that U.S. refiners were basically going to be able to, to, to expand their margins. And that's exactly what has happened. And now we've seen, obviously refined product margins widen even more. And so companies like our refiners like Valero and Marathon Petroleum and Phillips 66 have all over the last couple of quarters, just seen a massive amount of free cash flow generated and a lot of that's been paid back to, to shareholders in the form of share buybacks and or dividend or higher dividends, refiners and capacity being so tight globally, how high can the refining margins really go? And how much of that upside is already reflected in these stocks? And more specifically, which names do you like here? Yeah. Well, I think I think you're going to continue to see as long as refined product demand continues to be there. And I think that's what people thought. We might see a little bit of a slowdown in demand demand destruction. I don't know if we've really seen any of that at all. In fact, what we've seen is companies like Valero actually are are benefiting from a refined product exports as well as the higher cracks, crack spreads that Sam was talking about earlier. And so the names to like are like a Valero. That's who that's one of the names we like here. Here at tortoise. We also like Marathon Petroleum as well. But both those stocks as you highlight have done really well. They've done really well over just the last well well really over the last year, over the last couple of years. However, we still think that there is opportunities to make money in the refining trade. We still think that you're going to continue to see demand for gasoline, diesel and jet fuel continue to rise, even as even, you know, as oil prices have, have, have, have increased the economies. If they're going to continue to run both domestically and globally, you're going to need all of these refined products. And so there's still an opportunity for that. And as a result, we would we would still suggest that investors really look at the energy sector in general, but also the refining sector in particular for some opportunities. But, Rob, this has had an incredible run this year. I mean, it's really been an outperforming sector. If there's still money to be made here. I mean is it too late to get in. Would you have to wait for a pullback or does it not matter. I don't think you necessarily have to wait for a pullback. Now. You know obviously if you if there's some sign of global economic a global economic slowdown or or some potential truce, I guess in the middle in the Middle East, you know, if you've been waiting for that and some investors are waiting for that, and that's a fair, fair representation to make. But obviously it's not it doesn't appear as happening anytime soon. And so I think there's in the meantime, I guess if you didn't get involved in the energy sector at all this year, you've lost out on some returns and you're lagging because, you know, if you're still waiting for a peace deal, it's probably going to be a little while yet. And Rob, how are you looking at liquefied natural gas? I mean, when this first all started, we were talking about LNG so much. I feel as though we've moved back our focus to talking about oil prices quite a bit. But is there still opportunity here in LNG? Yeah, significant opportunity at tortoise. We we see liquefied natural gas and exports of liquefied natural gas as a significant opportunity. You know, if you think about I mean, we all know what the situation is and, you know, your viewers know. But just as a reminder, the US produces so much natural gas that we we are not only the largest producer of natural gas, but also the largest exporter of natural gas. And, and as a result of that, there's a lot of opportunity here as well. I mean, one of the one of the casualties of the war has been that the number two exporter of natural gas, Qatar, is actually has its facilities. And they're down. They're not they're not operating. They're going to have to be repaired. And that's going to take a little while. So that creates an opportunity because European natural gas inventories are are pretty low right now. The Europeans need to refill their natural gas inventories. So where are they going to come. They're going to come to the US for that. And so in the meantime, what we've seen is European natural gas prices rise pretty substantially. U.S. natural gas prices have stayed fairly steady. So there there's a company out there like Venture Global that benefits from higher European prices relative to U.S. prices. Well, then obviously the companies like Venture Global are going to make a little bit more money here and during during this time period. And so we do see LNG as an opportunity. And all the LNG exporters out of the U.S. both junior and venture global, is opportunities for investors. Rob, great to chat with you. Thanks for taking the time to be with us, to take a closer look at some of the opportunities that