Hedge funds are shifting their energy strategies, betting against oil stocks and unwinding shorts on solar as concerns about supply and demand in the oil industry grow. Portfolio managers have stayed net long on wind stocks while the analysis shows a reversal of bets that had been dominant since 2021. The rise in oil supply and economic slowdown in the US and China are contributing to the skepticism towards the oil sector. On the other hand, solar and wind stocks are starting to see improvements, with renewables expected to meet more than half of the additional energy demand by 2035 due to AI-driven energy needs. In China, green stocks are rebounding, while in the US, Trump administration policies have led to the cancellation of over $22 billion in clean energy projects. Despite these challenges, the decision to slash green subsidies has helped reduce policy uncertainty and allowed investors to evaluate wind and solar businesses more effectively. The rebound in green stocks has coincided with a decline in oil company stocks, driven by factors like tariff wars and renewable energy growth. The shift in funds’ strategies reflects the growing importance of low-carbon energy in the global energy landscape and the continued growth of renewables in meeting energy demands.

Read more at Yahoo Finance: Hedge Funds Flip on Green Energy and Start Betting Against Oil