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BA Deere
Honored Advisor

Playing chicken with the oil market

Russia announced it won`t reopen the Nordstream pipeline until the collective west lifts all sanctions.  I shoulda filled my barrels and booked 28% last week.   Stupid stupid stupid!   But West Texas is currently down 46¢  and RBOB is down a penny and natty isn`t exactly screaming above $9, so go figure.  Is "recession" the Royal Flush?

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23 Replies
erikjohnson61y
Senior Advisor

Re: Playing chicken with the oil market

My bet (for what it's worth) is that the low will come late September/early October.  They are currently planning on stopping the 1 million barrel per day robbing of the SPR in October. The election is in November, so Lucy can pull the football away from Charlie Brown when America is again faked into thinking Dems can solve economic problems as well as they create them.

A key thing to watch is the lockdowns in China. In the end, America may look like the smart one for just letting covid run wild and getting it over with quickly (despite stoopid mandates). China is STILL bent on a zero-covid policy, and are now hurting their own economy as badly as we hurt our own. I woulda thought they were smarter than that, having seen us do it first. But all good things must come to an end - when covid goes from pandemic to endemic in China, their energy demands will come roaring back and worldwide oil production capacity is still be just barely above demand. We WILL see $150 oil again, just not sure when.

I grit my teeth and filled my diesel tanks at $4.26 last week. But in the end, doubling my diesel cost means another $15/acre in costs. Doubling fertilizer means another $125/acre in cost on corn.  Higher diesel kinda gets lost in the noise. My friend in The Netherlands says electricity is 75cents/kwh and natural gas is $96/1000 cubic feet. Europe is in really bad shape energy-wise.  Hope we learn from their poorly executed energy transition.

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timetippingpt
Honored Advisor

Re: Playing chicken with the oil market

"Hope we'll learn"....you should do late night 🙂

CA has it figured out . Require electric cars AND trucks btw, build no power plants, and then when it gets hot, prohibit car charging...genius. 

 

sdholloway56
Senior Advisor

Re: Playing chicken with the oil market

The very definitely non-zero probability wild card would be a collapse of the Russian military in Ukraine and subsequent fall of the Putin dictatorship.

I wouldn’t expect anything for a few months- for now the Ukrainians are just shaping the battlefield- beating the Russians up and reducing their capacity to defend the ground they’ve taken.

But if/when it happens it will happen fast.

 

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sam1wiseone
Senior Contributor

Re: Playing chicken with the oil market

This must be one of noxzi sources of information.  Notice the guys "rifle".

https://www.dailymail.co.uk/video/news/video-2765379/Video-Ukrainian-man-shot-Russian-jet-rifle-give...

BA Deere
Honored Advisor

Re: Playing chicken with the oil market

Sam, that`s one of those new fangled 12 gauge pump rifles.  😀

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unlgrad
Advisor

Re: Playing chicken with the oil market

He has a rifle in the video feed.

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k-289
Senior Advisor

Re: Playing chicken with the oil market

Leaves  one  asking  why  Texas  issued  several Million  Dollars  in  tax  incentives  for  Elon & Tesla  ?  ?  ? 

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sdholloway56
Senior Advisor

Re: Playing chicken with the oil market

Your baseline assumption is that Putin holds all the trump cards. Western fascists desperately need to believe in the power of Putin and Russia no matter how much evidence emerges to the contrary. So no point in discussing that further.

Anyway, oil traded in a $80-120 Band from around ‘07-‘14 when fracking (and a strong dollar) popped the bubble.

Pandemic gave oil producers a way out of the frack trap and they’re going to do their darndest to avoid falling into it again.

Hundrefs of $Bs were lost in fracking oil. Eastern gas fracking has fared better.

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sdholloway56
Senior Advisor

Re: Playing chicken with the oil market

Western sanctions are beginning to hit the Russian war machine hard,

Thats why Putin is buying a million shells and rockets from Trumps NoKo pal.

And drones from Iran.

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