The Angle from T. Rowe Price Oil and Gas – The Persistent Role for Fossil Fuels
12 snips
Jan 7, 2026 
Priyal Maniar, an equity analyst specializing in North American energy, and Elliot Hsu, a credit analyst in energy and commodities, explore the crucial role of fossil fuels in our energy landscape. They discuss how productivity shapes long-term oil and gas prices while contrasting it with short-term market shocks like geopolitical tensions. Both highlight natural gas as a vital bridge in the energy transition. They also emphasize the importance of midstream infrastructure investments and the risks associated with capital discipline in today's energy market.
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Cost Curves Drive Long-Term Cycles
- Productivity and cost curves are the primary long-term drivers of commodity prices.
- A cycle turns bullish when marginal costs rise and bearish when costs fall due to productivity gains.
Trends Versus Shocks
- Long-term price trends reflect productivity-driven bull and bear cycles visible over decades.
- Short-term shocks like geopolitics and weather cause deviations around those structural trends.
Use Bottom-Up Analysis With Valuation
- Build a bottom-up understanding of companies and use disciplined valuation at sector and company levels.
- Compare company strategy and capital allocation to the cost curve to assess vulnerability to shocks.