Demand for hydrocarbons is fairly inelastic compared to things like avocados or new cars. As mentioned above, contracts lock in prices and for Oz there's no sign for the next decade of any relief from the gas supply shortages currently ongoing.
In a recession, investors may migrate to companies earning a constant stream of dollars eschewing things like speccies, companies with high debt or hot tech stocks even if that means pushing the P/E ratio higher due to favouring the safety and stability of income.
Anyone perusing the stock prices in recent weeks has seen poor results really getting smashed with double digit % falls in SP. After December's little shock, institutions seem to have decided they've got no appetite for patience and are dumping out en masse on bad news.
SXY Price at posting:
37.5¢ Sentiment: Buy Disclosure: Held
