The Energy Word Founder Daniel Dicker joins Yahoo Finance Live to discuss the rise in oil prices as traders weigh the optimism of increased demand from China, tightening monetary policy, and the outlook for oil.

Video Transcript

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JULIE HYMAN: And now, let's get to the eternal push-pull. Oil traders are weighing the optimism for increased demand coming from China, while at the same time grappling with concerns over tighter US monetary policy. And not just in the US, of course. So where does this leave prices?

Here to discuss is Daniel Dicker, founder of the Energy Word. Dan, it's good to see you. So we have these kind-- this kind of push-and-pull, right? On the one hand, increased China demand, good for oil. On the other hand, tightening monetary policy is not traditionally great for oil. How does it all shake out?

DANIEL DICKER: Hi. Julie, we don't want to do another monetary policy segment. You've got 40 of those set up for the rest of the day. And you know, let's talk oil. Oil, fundamentally, is about as strong as I've ever seen it. And sure, we've got prices that are lower than what they probably fundamentally should be. And it's all because of all those 40 other segments you're going to do for the rest of the day.

But you know, I look at something like ExxonMobil, and it's trading $110, $111, $112, $113 a share. And the last time that oil was bouncing around the $70 mark, you know, right before the beginning of the year, Exxon was actually trying very hard to breach $70 a share itself. Now, one of these two is wrong.

Either oil is too cheap or Exxon is too expensive. And you know, my feeling has always been that the stocks are really representing the profitability of oil and the long-term possibilities of oil.

We know very-- how deeply involved Russia remains in Ukraine and how this problem, this systemic supply problem coming from the largest natural gas producer in the world and the third-largest oil producer in the world is going to be going forward. That is going to go on for a long, long time.

There are hold backs going on from the Saudis. In the United States, there's all sorts of-- all of the great plays have been drilled. And now, you see shops like, for example, Pioneer supposedly bidding on range resources because there's no new production to be found or really golden new production to be found in the United States. Everybody's looking to buy it at this point.

So I'm looking at a long term-- for your investors, I'm looking at a very long-term picture of reducing supply and not much of a demand destruction going on from anywhere. In fact, I see a lot of places where I think that because of the global dustups going on in Europe and elsewhere, that demand picture for fossil fuels, despite all the renewable pressures, is going to increase going forward, at least for the next five years.

BRAD SMITH: Yeah, I want to actually get to more on that renewable pressure there. Because when you layer on everything that you were talking about from a longer term perspective with some of the ambitious goals that we've seen rolled out by many companies in energy included, about how to get to more clean energy and sustainable energy, what is the investor's mindset and how they should be kind of pricing their time horizon?

DANIEL DICKER: Right, Brad. And I think this stuff is very much on hold right now, unfortunately. I mean, I read article after article about the Indians-- in India, they're absolutely-- they're absolutely thrilled about going back to coal because it's cheap, it's fungible, they have the infrastructure set up for it. And even in Europe, the best stocks of 2022 were coal stocks.

I mean, it's terrible to say, but when there's a shortage of energy, people are gonna reach to what's cheapest and what's most easily used. And to heck with the environment. And that's what's really going on right now. And for that, I see a lot of the oil companies, BP for example, who has spent the last 10 years trying to refashion themselves as a sort of sustainable energy company, pivot back to oil and other fossil fuels at least for the foreseeable future.

And particularly because of what's going on in Europe and with Ukraine, I think those pressures are far less serious than they were perceived to be even a couple of years ago. I saw Larry Fink, you know, several months ago, very much abandon his push in ESG.

I mean, these are the signs that you look at where it's not allowed-- nobody wants to loudly say, oh, I'm going back to burning oil, as opposed to trying to, you know, make solar work for me. But it is something that economically, you see happening over and over again, basically because of what's going on in Europe.

JULIE HYMAN: And so what does all of this mean for investors, Dan? To go back to your first point here. I mean, we've talked to a lot of people this year who have said, we still like energy stocks. Energy stocks have not done so great so far this year, at least here in the US. So is that gonna change? Or is it just people are not picking the right, specific ones?

DANIEL DICKER: Yeah, you know, what I've been telling my subscribers for a long time is that you really have to play defense. The Fed has control of this market. They're targeting inflation on commodities, and that means oil, number one. And that means, you know, that energy is in the crosshairs.

But at times, you find these tremendous values. And you know, I've been, you know, pointing out to my subscribers for example, EQT, last week, was under $30. Just a tremendous value to buy some and put it away. And something like Core, Core Labs, which is a services company that's directly in Europe. It has a very strong presence in Europe.

And these services companies because of what's going on in Europe, when they reach values, when they reach levels are worth a long-term play. And all of this right now is long term. I would not be looking, you know, to find a bottom. I would not expect some of these stocks to go down further. I do expect them to go down further. It's gonna be a tough year. But there are spots where tremendous, tremendous long-term values in energy stocks can be found.

JULIE HYMAN: All right, well, we'll see what ends up happening with them over the long term. Thanks so much, Dan Dicker of the Energy Word. Appreciate it.