WEBVTT - Venezuela’s Oil Reserves Versus Reality: Why Output Can’t Jump Overnight

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News. Welcome to Merin Trucks Money,

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<v Speaker 1>the podcast in which people who know the markets explain

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<v Speaker 1>the markets. I'm Merin Sumset Web and today I am

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<v Speaker 1>speaking with Michael Haig, Managing director and global head of

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<v Speaker 1>Fixed Income and Commodities Research for Society General R.

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<v Speaker 2>Well.

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<v Speaker 1>It has been a fairly eventful start to the year,

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<v Speaker 1>to say the least. In a move that's stunned most

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<v Speaker 1>of US US forces carried out the audacious seizure of

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<v Speaker 1>Venezuela's president, Nicholas Maduro. Now, given the Venezuela holds the

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<v Speaker 1>largest proven oil reserves on the planet, this has major

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<v Speaker 1>implications for the oil markets, or rather a lot of

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<v Speaker 1>people think it has major implications for the oil markets.

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<v Speaker 1>We're going to get into that with Michael. But also,

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<v Speaker 1>of course we are not going to let them go

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<v Speaker 1>without talking about gold and silver and how we can

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<v Speaker 1>make even more money im precious metals. Michael, Welcome to

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<v Speaker 1>Merin Talks Money.

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<v Speaker 2>Great to be here, Thank you.

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<v Speaker 1>Okay, Now, I just I said that at the end

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<v Speaker 1>about making even more money and gold and silver. Because

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<v Speaker 1>Marin talks money, listeners I think are quite heavily invested

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<v Speaker 1>in precious metals, so we will get to that, hopefully

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<v Speaker 1>we'll have quite a lot of time for that. But

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<v Speaker 1>I think we kind of got to start with Venezuela,

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<v Speaker 1>haven't we. I said in the introduction about the massive

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<v Speaker 1>oil reserves, the largest on the planet. But of course,

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<v Speaker 1>at the moment, Venezuela produces very little oil, well under

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<v Speaker 1>a million barrel today, and this move doesn't really mean

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<v Speaker 1>that they'll be producing much more in the near future,

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<v Speaker 1>so maybe there aren't really any implications for oil markets

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<v Speaker 1>at all.

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<v Speaker 2>I think there is something a little bit technical that

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<v Speaker 2>we have to just bring up before we get into

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<v Speaker 2>how this affect the global markets. So when we talk

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<v Speaker 2>about the largest oil reserves in the world, this is

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<v Speaker 2>what Venezuela says that they have. And actually when we

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<v Speaker 2>talk about reserves, we talk about proven reserves, and that

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<v Speaker 2>has to do with the geology, how likely it is

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<v Speaker 2>that we can extract this easily, and the economics behind it.

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<v Speaker 2>So unless the economics makes sense, it's not considered to

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<v Speaker 2>be proven reserve. So when they announced they had three

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<v Speaker 2>hundred and three billion barrels of oil in reserves, this

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<v Speaker 2>is when oil prices were roughly one hundred dollars a barrel.

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<v Speaker 2>Now they're at sixty, so I don't know the exact

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<v Speaker 2>proven reserves that they would have, but it's certainly less

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<v Speaker 2>than three hundred and three billion barrels in reserves, but

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<v Speaker 2>it's still massive.

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<v Speaker 1>Hang on, Michael, can I can I just stop you there?

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<v Speaker 1>I want to go back to your definition there of

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<v Speaker 1>proven reserves. Do you mean if it's not economic to

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<v Speaker 1>remove it extracted at the current oil price, it doesn't

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<v Speaker 1>count as a proven reserve?

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<v Speaker 2>That's right? Yeah, okay, interesting, these things aren't audited all

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<v Speaker 2>the time. It's kind of a little bit you know,

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<v Speaker 2>the beauty is in the eye of the beholder. The

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<v Speaker 2>SEC actually has very strict definitions as to what's considered

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<v Speaker 2>to be a proven reserve. But price is forty dollars

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<v Speaker 2>lower than when we had the three hundred and three

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<v Speaker 2>billion barrel number being released to the market is a

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<v Speaker 2>bit high, but nonetheless it's still massive. Even eighty billion

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<v Speaker 2>barrels would be massive. But we have this number of

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<v Speaker 2>reserve out there, as you rightly point out, that doesn't

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<v Speaker 2>match what they produce and certainly doesn't match what they export.

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<v Speaker 2>So you're right, they produce about nine hundred thousand barrels

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<v Speaker 2>a day right now and export nine hundred minus two

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<v Speaker 2>hundred and fifty ish, because that's what they consume locally.

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<v Speaker 2>Now that difference, that export number has even dropped further

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<v Speaker 2>with sanctions. The other thing to point out, of course,

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<v Speaker 2>is that not all oil is equal, and Venezuela is

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<v Speaker 2>in a very special place in the sense that it's

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<v Speaker 2>oil isn't just heavy, it's what we call extra heavy.

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<v Speaker 2>So it's almost like goo coming out of the ground,

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<v Speaker 2>and that means that you need to add dilutant or

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<v Speaker 2>condensate or as we keep an eye on napther, so

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<v Speaker 2>you need to add that into the solution. It comes

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<v Speaker 2>out of the ground, and you even need it to refine.

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<v Speaker 2>So even if you could manage to change the entire

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<v Speaker 2>refining industry in the world to use just Venezuelan oil

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<v Speaker 2>at three hundred and three billion barrels, that would satisfy

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<v Speaker 2>eight years worth of consumption. Now that's not what's going

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<v Speaker 2>to happen. But just to give you some context on

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<v Speaker 2>the size of their.

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<v Speaker 1>Reserves, okay, can I just check with you? So where

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<v Speaker 1>does that additive come from? I think, as I understand it,

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<v Speaker 1>comes from Russia into Venezuela at the moment, but could

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<v Speaker 1>also be imported from the US.

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<v Speaker 2>Yes, right, yes, So back in the day, about three

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<v Speaker 2>hundred thousand barrels of naptha was being imported into Venezuela

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<v Speaker 2>from the United States. That match is about three million

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<v Speaker 2>barrels a day of production. So right now nine hundred

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<v Speaker 2>thousand barrels a day is being produced of crude oil

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<v Speaker 2>and about one hundred thousand barrels is being imported of

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<v Speaker 2>which in the last month that we had observation it

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<v Speaker 2>came from Russia and Singapore actually, but normally it comes

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<v Speaker 2>from Russia and China.

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<v Speaker 1>Okay. So with Venezuela can only be a major oil

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<v Speaker 1>producer and exporter of it has a symbiotic relationship with

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<v Speaker 1>an exporter of sorry, what's it called again, napthera naphtha.

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<v Speaker 1>You could only do it if it has a symbiotic

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<v Speaker 1>relationship with somebody who produces naptha.

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<v Speaker 2>It for its very extra heavy oil. It doesn't have

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<v Speaker 2>just extra heavy oil. It has the majority of it

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<v Speaker 2>is extra heavy.

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<v Speaker 1>Okay, thank you. And just for context, if we talk

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<v Speaker 1>about Venezuela producing at the moment under a million barrel

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<v Speaker 1>of oil a day? How much do the really big producers,

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<v Speaker 1>So the top producers in the world of the US, Saudi, Russia,

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<v Speaker 1>and they're all churning out well over ten million, right, yeah, twenty.

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<v Speaker 2>For the US thirteen million barrels a day. Saudi is

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<v Speaker 2>roughly nine, but they're cutting back on their production on purpose.

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<v Speaker 2>They could go up to eleven, Russias around ten, so

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<v Speaker 2>they're pretty small by all accounts.

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<v Speaker 1>Yeah, and then after that you get down to Iraq, Iran, Crea, etcetera,

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<v Speaker 1>all three, three, fourish and Norway a bit below that exactly, etcetera.

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<v Speaker 1>So it is possible in theory for Venezuela to get

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<v Speaker 1>up to sort of two three is right there with

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<v Speaker 1>three peak?

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<v Speaker 2>Oh yeah, for sure. I mean the question is how

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<v Speaker 2>long that would take?

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<v Speaker 1>That's my next question. How long if everything went well

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<v Speaker 1>for Venezuela. We can argue about what well means, but

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<v Speaker 1>in this context, let's have well becoming a country that

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<v Speaker 1>people feel is politically stable and financially stable enough to

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<v Speaker 1>invest in, and the oil infrastructure is gradually built out

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<v Speaker 1>as President Trump would like, using the big US oil

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<v Speaker 1>services companies. How long would it take for Venezuela that

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<v Speaker 1>are producing much more.

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<v Speaker 2>So, if we think about getting to between two and

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<v Speaker 2>three million barrels a day, most industry experts would say,

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<v Speaker 2>without rushing the situation, that would take between five and

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<v Speaker 2>ten years. If you listen to Donald Trump, he said

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<v Speaker 2>that his ambition is to actually get these things moving

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<v Speaker 2>in the next eighteen months. Now, it could get moving,

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<v Speaker 2>but it's certainly nothing to be excited about in terms

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<v Speaker 2>of barrel But if we wanted to go back to

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<v Speaker 2>where we were back in the days of the peak

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<v Speaker 2>three point four million barrels a day, I'm going to

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<v Speaker 2>guess ten years.

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<v Speaker 1>Okay, So I suppose the answer to the original question,

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<v Speaker 1>does the political change of Venezuela mean anything for the

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<v Speaker 1>oil market? The answer is kind of know.

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<v Speaker 2>It doesn't mean anything from a barrel perspective. It definitely

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<v Speaker 2>means something from a sort of a geopolitical perspective, because

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<v Speaker 2>within Venezuela you have China that is very much part

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<v Speaker 2>of its industry. Russia is very important in the context

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<v Speaker 2>of supplying that naptha, and also it's important in the

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<v Speaker 2>context of because Venezuelan oil has declined over the years,

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<v Speaker 2>Russian oil has replaced it. Because they're quite similar kind

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<v Speaker 2>of gravity levels, viscosity. So if you change the Venezuelan makeup,

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<v Speaker 2>you change the outlook for Russia, you changed the outlook

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<v Speaker 2>for China, and then you might get responses from them,

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<v Speaker 2>which creates some sort of more geopolitical term or potentially

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<v Speaker 2>and that then could as a second order, affect the

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<v Speaker 2>oil market.

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<v Speaker 1>Okay, And there are other things that may affect the

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<v Speaker 1>oil market and at the moment as well. I mean

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<v Speaker 1>you say that OPEK has been restricting output, but there

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<v Speaker 1>is political shifts in Saudi right which may change that. Yeah.

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<v Speaker 2>I mean, OPEK does what it has originally set up

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<v Speaker 2>to do, which is to manage the market, reduce the volatility,

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<v Speaker 2>and by doing that, it's essentially cutting its own production

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<v Speaker 2>or bringing its production back online. Right now, they are

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<v Speaker 2>still cutting. They were bringing back a lot of oil

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<v Speaker 2>barrels last year in twenty twenty five. They have cut

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<v Speaker 2>because they see surpluses rising, demand being quite low, so

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<v Speaker 2>they have refrained from bringing back their barrels until April.

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<v Speaker 2>In my own opinion, they're going to have to reevaluate

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<v Speaker 2>their strategy in April because we're very, very oversupplied, and

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<v Speaker 2>that's even ignoring Venezuela. So yeah, there's a few dynamics

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<v Speaker 2>at play here. There's another dynamic, of course, which isn't

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<v Speaker 2>real demand. Its Chinese strategic petroleum reserve buying. So that's

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<v Speaker 2>them putting oil into their commercial as well as government

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<v Speaker 2>stockpiles for quote unquote energy security. That has been absolutely

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<v Speaker 2>rampant over the last six months, maybe even the last

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<v Speaker 2>nine months, and that is part of the reason, if

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<v Speaker 2>not the majority of the reason as to why oil

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<v Speaker 2>prices haven't dropped yet.

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<v Speaker 1>So, Michael, let's talk more about this Chinese strategic reserve.

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<v Speaker 1>Why are they building this? What's the plan?

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<v Speaker 2>Well, China imports roughly twelve million barrels a day of

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<v Speaker 2>oil eleven twelve million barrels a day. They're not a

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<v Speaker 2>significant enough producer so that they don't have to rely

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<v Speaker 2>on the international markets. Most of that oil is obviously

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<v Speaker 2>coming from the Middle East and Russia, some of it

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<v Speaker 2>a little bit comes from Venezuela. But obviously they're in

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<v Speaker 2>a very sensitive situation, so they have been building out

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<v Speaker 2>their spr strategic pratronium reserve and they combine that with

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<v Speaker 2>their commercial reserves. Actually that belong to the state owned

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<v Speaker 2>oil companies and we guess that they have roughly one

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<v Speaker 2>point four billion barrels in SPR. Compare that to the US,

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<v Speaker 2>which has probably about four hundred million barrels. So it's

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<v Speaker 2>gigantic and some people believe, and I think it's a

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<v Speaker 2>little bit extreme, that this could go to two billion

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<v Speaker 2>barrels by the end of twenty twenty six, but probably

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<v Speaker 2>more like one point five to one point six. If

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<v Speaker 2>you divide that those billions by their daily import numbers,

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<v Speaker 2>they're covered for not just thirty days, they're covered for

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<v Speaker 2>hundreds of days should anything go wrong. So you have

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<v Speaker 2>a lot of conspiracy theorists that think, okay, well, what

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<v Speaker 2>if they invaded Taiwan and the West cut off their

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<v Speaker 2>supplies of oil? How long could they survive for? Who

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<v Speaker 2>knows what the motivation is. They'll say they're building their

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<v Speaker 2>SPR for energy security. There's no rawl in place as

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<v Speaker 2>to how much they must accumulate. But these numbers are gigantic.

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<v Speaker 2>But at some point they'll stop buying and that's what

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<v Speaker 2>will affect be all.

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<v Speaker 1>Market slight side question, how do you store that amount

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<v Speaker 1>of oil?

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<v Speaker 2>Well, I mean it depends on where you are in

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<v Speaker 2>the world. There are natural caverns in the US. For instance,

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<v Speaker 2>they're called salt dome caverns. They're along the Gulf coast,

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<v Speaker 2>so these are natural caverns with very thick salt that

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<v Speaker 2>has been solidified, so it's a natural storage facility and

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<v Speaker 2>it's very cheap to store it there. But generally speaking,

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<v Speaker 2>you're building these facilities. These could be above or underground

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<v Speaker 2>storage facilities, which by the way, is very metal intensive,

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<v Speaker 2>so these are basically large storage facilities.

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<v Speaker 1>Huh okay, amazing. Well, I mean, it seems perfectly sensible

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<v Speaker 1>for China to do that under circumstances, wouldn't you say,

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<v Speaker 1>And obviously they must have much higher reserves than the

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<v Speaker 1>US if they're going to do it, because the US

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<v Speaker 1>is such a big producer in China is not. So exactly,

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<v Speaker 1>this makes sense in not necessarily a scary way.

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<v Speaker 2>It does. It's just that we've never seen these kind

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<v Speaker 2>of builds we have in the past with China, which

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<v Speaker 2>leads to the question of why they're doing it. But

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<v Speaker 2>without trying to get too deep into that, it's about

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<v Speaker 2>energy security.

0:11:44.800 --> 0:11:46.839
<v Speaker 1>At the end of the day, let me ask you

0:11:46.840 --> 0:11:49.319
<v Speaker 1>about the long term outlook for oil. I know you

0:11:49.400 --> 0:11:51.600
<v Speaker 1>wrote an interesting article the other day, not the other

0:11:51.640 --> 0:11:55.040
<v Speaker 1>day a while back about comparing whale oil to oil

0:11:55.520 --> 0:11:59.240
<v Speaker 1>and about how long it took, even even once crudel

0:11:59.400 --> 0:12:02.400
<v Speaker 1>was discovered started to be used, how long it took

0:12:02.440 --> 0:12:04.719
<v Speaker 1>for people to stop using whale oil. So you say

0:12:04.760 --> 0:12:07.760
<v Speaker 1>it was about fifty years until it was only negul

0:12:07.760 --> 0:12:09.839
<v Speaker 1>little supply coming into the US. And of course you

0:12:09.880 --> 0:12:11.800
<v Speaker 1>could argue that's because there weren't very many whales left,

0:12:12.480 --> 0:12:17.480
<v Speaker 1>or it could just be the gradual shift from waleil

0:12:17.000 --> 0:12:19.440
<v Speaker 1>to crude oil. And I think the point you were

0:12:19.440 --> 0:12:22.679
<v Speaker 1>trying to make there was that if an energy infrastructure

0:12:22.800 --> 0:12:25.080
<v Speaker 1>is set up for one type of energy, it takes

0:12:25.080 --> 0:12:28.160
<v Speaker 1>a very very long time to shift it to using

0:12:28.200 --> 0:12:29.760
<v Speaker 1>a different type of energy.

0:12:29.840 --> 0:12:32.319
<v Speaker 2>No, that's exactly right, And by all accounts, back in

0:12:32.360 --> 0:12:37.120
<v Speaker 2>the eighteen sixties, seventies, eighties nineties, where we saw this

0:12:37.200 --> 0:12:39.600
<v Speaker 2>decline in whale oil imports into the US and the

0:12:39.600 --> 0:12:42.600
<v Speaker 2>growth of the crude oil industry, you know, the infrastructure

0:12:42.640 --> 0:12:44.839
<v Speaker 2>was a lot more simple. Let's say, in the world

0:12:44.960 --> 0:12:48.120
<v Speaker 2>wasn't addicted to oil. Now the entire world is set

0:12:48.200 --> 0:12:51.920
<v Speaker 2>up for oil. In fact, you know, if you did

0:12:51.960 --> 0:12:55.440
<v Speaker 2>want to transition away from oil, that's certainly likely to

0:12:55.440 --> 0:12:58.079
<v Speaker 2>happen within the developed markets, but I don't anticipate it

0:12:58.120 --> 0:13:00.040
<v Speaker 2>happening in the emerging markets. In fact, that's going to

0:13:00.080 --> 0:13:00.839
<v Speaker 2>continue to grow.

0:13:01.200 --> 0:13:03.160
<v Speaker 1>Yeah, I mean, one of the unusual things about the

0:13:03.200 --> 0:13:05.440
<v Speaker 1>whale old story, well, it's very interesting, is it is

0:13:05.480 --> 0:13:08.800
<v Speaker 1>one of the few examples of a source of energy

0:13:09.280 --> 0:13:12.600
<v Speaker 1>stopping being used, whereas everything else has been not a

0:13:12.600 --> 0:13:15.760
<v Speaker 1>transition but an addition. Right, It's exactly more, we use

0:13:15.800 --> 0:13:18.360
<v Speaker 1>more word, we use more coal, we use more oil,

0:13:18.400 --> 0:13:20.720
<v Speaker 1>et cetera, et cetera. Everything we add on is simply

0:13:21.120 --> 0:13:25.199
<v Speaker 1>an addition. So with that in mind, the idea that

0:13:25.880 --> 0:13:30.760
<v Speaker 1>long term demand for oil will actually fall is that

0:13:30.880 --> 0:13:32.520
<v Speaker 1>for argument, isn't it?

0:13:32.280 --> 0:13:33.280
<v Speaker 2>It certainly is.

0:13:33.400 --> 0:13:35.959
<v Speaker 1>That would be very unusual in the history of the world,

0:13:36.160 --> 0:13:37.559
<v Speaker 1>Very very unusual.

0:13:37.240 --> 0:13:39.960
<v Speaker 2>That's right. And if you look at projections from US

0:13:40.120 --> 0:13:45.120
<v Speaker 2>oil majors, from European oil majors, from industry associations like

0:13:45.160 --> 0:13:49.360
<v Speaker 2>the International Energy Agency, for example, the EIA out of

0:13:49.360 --> 0:13:54.280
<v Speaker 2>the USA, the path of oil demand out of twenty

0:13:54.360 --> 0:13:57.240
<v Speaker 2>fifty is just so wide in terms of opinions as

0:13:57.240 --> 0:13:59.920
<v Speaker 2>to where we go. Some think it continues to grow,

0:14:00.080 --> 0:14:03.880
<v Speaker 2>some things, it declines dramatically from here on out. My

0:14:04.040 --> 0:14:06.440
<v Speaker 2>own opinion on this matter when you look at the

0:14:06.559 --> 0:14:09.480
<v Speaker 2>vast array of paths that oil could go, is that

0:14:09.600 --> 0:14:13.160
<v Speaker 2>I anticipate that we peak at about one hundred and

0:14:13.240 --> 0:14:16.800
<v Speaker 2>thirty million barrels a day of demand for oil, and

0:14:16.840 --> 0:14:20.400
<v Speaker 2>then we get a gradual decline starting around twenty thirty

0:14:20.400 --> 0:14:21.400
<v Speaker 2>five twenty forty.

0:14:21.560 --> 0:14:23.080
<v Speaker 1>What is total demand now.

0:14:22.920 --> 0:14:25.160
<v Speaker 2>So that one hundred and thirty million barrels a day

0:14:25.200 --> 0:14:27.480
<v Speaker 2>compares to total demand today of around one hundred and

0:14:27.520 --> 0:14:29.040
<v Speaker 2>three hundred and four million barrels a.

0:14:29.080 --> 0:14:32.320
<v Speaker 1>Day, okay, and then a decline from twenty thirty five

0:14:32.520 --> 0:14:36.600
<v Speaker 1>as we shift to what or as global population peaks

0:14:36.600 --> 0:14:37.800
<v Speaker 1>in declines the.

0:14:37.720 --> 0:14:40.760
<v Speaker 2>Population angle wouldn't really have a big of an impact there.

0:14:40.840 --> 0:14:44.760
<v Speaker 2>I think what's replacing oil at that point is natural gas. Obviously,

0:14:44.800 --> 0:14:49.960
<v Speaker 2>we see a lot of investment in liquefication and regasification

0:14:50.600 --> 0:14:54.280
<v Speaker 2>facilities around the world. Natural gas is most certainly the

0:14:54.360 --> 0:14:58.520
<v Speaker 2>transitional commodity that can be shipped around globally, and there's

0:14:58.520 --> 0:15:02.480
<v Speaker 2>a lot more oppeiing than say something like coal. But yes,

0:15:02.560 --> 0:15:06.320
<v Speaker 2>I mean the vast majority of what declines for oil

0:15:06.480 --> 0:15:09.200
<v Speaker 2>by twenty thirty five and twenty forty is coming from

0:15:09.240 --> 0:15:14.680
<v Speaker 2>the developed markets. And that switch to natural gas and alternatives, renewables,

0:15:14.680 --> 0:15:18.200
<v Speaker 2>et cetera. But you know, as I mentioned, if you

0:15:18.240 --> 0:15:21.120
<v Speaker 2>looked at the growth of demand the developed markets, you'd

0:15:21.160 --> 0:15:23.920
<v Speaker 2>see it coming down in twenty thirty five. You'd see

0:15:23.920 --> 0:15:27.160
<v Speaker 2>the emerging markets still increasing beyond twenty thirty five. But

0:15:27.240 --> 0:15:30.680
<v Speaker 2>the decline in the developed mildly offsets the increase in

0:15:30.720 --> 0:15:33.040
<v Speaker 2>the emerging markets, and that's why you see the decline.

0:15:34.240 --> 0:15:37.440
<v Speaker 1>Interesting. I'm getting briefly back to whale oil. You know,

0:15:37.480 --> 0:15:40.200
<v Speaker 1>there was there a supply problem there, right, and I

0:15:40.280 --> 0:15:43.080
<v Speaker 1>don't know if you if you remember, I certainly do,

0:15:43.200 --> 0:15:46.720
<v Speaker 1>the stress over peak oil a while back, where everyone

0:15:46.880 --> 0:15:48.880
<v Speaker 1>was convinced that we were actually going to run out

0:15:48.880 --> 0:15:50.840
<v Speaker 1>of oil, that there'll be no more discoveries, there'll be

0:15:50.880 --> 0:15:53.680
<v Speaker 1>no more reserves, and we had to make the transition

0:15:53.760 --> 0:15:56.400
<v Speaker 1>to other sources of energy, not because of climat or

0:15:56.480 --> 0:15:58.760
<v Speaker 1>environmental worries, but because we were going to run out

0:15:58.760 --> 0:16:01.760
<v Speaker 1>of the stuff. That no longer seems a risk at all.

0:16:01.800 --> 0:16:05.640
<v Speaker 1>We constantly seem to be new discoveries. And did peqil

0:16:05.760 --> 0:16:07.040
<v Speaker 1>just disappear as an idea?

0:16:07.560 --> 0:16:10.800
<v Speaker 2>Yeah? I think so, because you know, we went through

0:16:11.040 --> 0:16:14.280
<v Speaker 2>in fairly recent history and call it the two thousand

0:16:14.320 --> 0:16:19.120
<v Speaker 2>to twenty fifteen period of time where technology really was

0:16:19.120 --> 0:16:21.920
<v Speaker 2>developed to extract oil that we didn't think we had before,

0:16:22.120 --> 0:16:24.640
<v Speaker 2>at least we didn't think we had assets access to.

0:16:24.720 --> 0:16:27.800
<v Speaker 2>And what I'm talking about there is shale oil, which

0:16:27.840 --> 0:16:30.360
<v Speaker 2>is a US story. This was not part of any

0:16:30.360 --> 0:16:32.680
<v Speaker 2>conversation before the year two thousand. Now, I know, I'm

0:16:32.760 --> 0:16:35.280
<v Speaker 2>going back twenty five years, but that is relatively recent

0:16:35.720 --> 0:16:37.960
<v Speaker 2>and is still an incredibly part of the equation. So

0:16:38.640 --> 0:16:40.560
<v Speaker 2>that wasn't part of the discussion when we were talking

0:16:40.640 --> 0:16:44.280
<v Speaker 2>about peak oil back many many decades ago. But it

0:16:44.360 --> 0:16:47.200
<v Speaker 2>just goes to show, you know, when you're running out

0:16:47.240 --> 0:16:51.440
<v Speaker 2>of something or prices getting too high, technology has a

0:16:51.480 --> 0:16:54.640
<v Speaker 2>way of fixing the problem, and high prices have a

0:16:54.680 --> 0:16:58.320
<v Speaker 2>way of fixing the prosblem. So even without delving into

0:16:58.320 --> 0:17:01.720
<v Speaker 2>technological advancements, if prices start to go up because you're

0:17:01.760 --> 0:17:04.800
<v Speaker 2>thinking about running out of something, this incentivizes the oil

0:17:04.880 --> 0:17:09.359
<v Speaker 2>companies to invest more in places where you weren't extracting

0:17:09.400 --> 0:17:09.959
<v Speaker 2>all before.

0:17:10.760 --> 0:17:13.200
<v Speaker 1>Yeah, well, as they were saying, commodities, right, the solution

0:17:13.240 --> 0:17:32.040
<v Speaker 1>to high prices is high prices exactly. We could leave

0:17:32.200 --> 0:17:35.119
<v Speaker 1>oil now but stick with energy and move maybe to

0:17:35.240 --> 0:17:37.840
<v Speaker 1>talking about copper, because a big part of the idea

0:17:37.880 --> 0:17:42.879
<v Speaker 1>of transitioning into a more electrified world is one in

0:17:42.920 --> 0:17:47.280
<v Speaker 1>which we upgrade our grids, we make everything run off electricity,

0:17:47.280 --> 0:17:49.920
<v Speaker 1>and we use renewable sources more, etc. Now, everyone who

0:17:49.960 --> 0:17:52.600
<v Speaker 1>listens to this podcast, in fact, anyone who reads the newspapers,

0:17:52.640 --> 0:17:55.400
<v Speaker 1>will know what a problem that is and the huge

0:17:55.440 --> 0:17:58.520
<v Speaker 1>infrastructure demands that we have going forward, and that of

0:17:58.520 --> 0:18:01.920
<v Speaker 1>course has affected the i s of various industrial commodities.

0:18:01.960 --> 0:18:04.919
<v Speaker 1>And copper is the classic right for the electrification of

0:18:04.920 --> 0:18:06.840
<v Speaker 1>the world, and we've seen it at new high after

0:18:06.920 --> 0:18:10.159
<v Speaker 1>new high after new high. Is the solution to high prices?

0:18:10.200 --> 0:18:13.040
<v Speaker 1>There high prices or are the dynamic different? Today?

0:18:13.560 --> 0:18:18.359
<v Speaker 2>Copper does have a very unique outlook actually, because you know,

0:18:18.680 --> 0:18:21.480
<v Speaker 2>we can talk about electrification of the world and need

0:18:21.560 --> 0:18:25.159
<v Speaker 2>for copper and other base metals in energy transition. But

0:18:25.560 --> 0:18:27.680
<v Speaker 2>you know, before we started, let's just step back, before

0:18:27.680 --> 0:18:31.520
<v Speaker 2>we started talking about energy transition, the whole premise behind

0:18:31.560 --> 0:18:37.399
<v Speaker 2>copper's rise or demand was purely about urbanization and population growth.

0:18:38.640 --> 0:18:41.960
<v Speaker 2>That became less of a subject because we're all pretty

0:18:42.000 --> 0:18:44.760
<v Speaker 2>much aligne that China has peaked in terms of its

0:18:44.880 --> 0:18:51.280
<v Speaker 2>use for copper, incremental demand for copper for urbanization needs

0:18:51.320 --> 0:18:55.639
<v Speaker 2>and population growth. And the question then became, ten years ago,

0:18:56.280 --> 0:19:00.360
<v Speaker 2>would the incremental demand from electrication demand for copper way

0:19:00.440 --> 0:19:03.760
<v Speaker 2>the decline that you would get from copper through demand

0:19:03.800 --> 0:19:07.800
<v Speaker 2>declines from traditional demand, And the answer to that is yes.

0:19:08.280 --> 0:19:10.440
<v Speaker 2>So if you go country by country and you look

0:19:10.480 --> 0:19:14.440
<v Speaker 2>at what they're planning to do their stated policies for electrification,

0:19:14.600 --> 0:19:16.639
<v Speaker 2>and you add up what does that mean in terms

0:19:16.640 --> 0:19:20.399
<v Speaker 2>of tonnage of copper, and you compare that to the

0:19:20.480 --> 0:19:23.800
<v Speaker 2>declining copper through traditional needs, it offsets it. So it

0:19:23.880 --> 0:19:27.280
<v Speaker 2>always had this kind of bullish story. And we've been

0:19:27.359 --> 0:19:29.800
<v Speaker 2>talking about this for four or five years. Even before

0:19:29.840 --> 0:19:32.879
<v Speaker 2>COVID COVID hits, we didn't talk about anymore. We had

0:19:32.920 --> 0:19:35.520
<v Speaker 2>lots of other things to worry about, including energy security,

0:19:35.520 --> 0:19:38.200
<v Speaker 2>in the cost of living crisis, etc. But a couple

0:19:38.240 --> 0:19:41.920
<v Speaker 2>of things have changed in the last two three years

0:19:41.920 --> 0:19:44.200
<v Speaker 2>for copper and it's given it an extra leg up.

0:19:44.560 --> 0:19:48.040
<v Speaker 2>So the first one, of course, is AI and data centers. Right,

0:19:48.080 --> 0:19:50.560
<v Speaker 2>we talk about data centers and we talk about how

0:19:50.880 --> 0:19:53.800
<v Speaker 2>energy intensive they are, but let's imagine you go inside

0:19:53.840 --> 0:19:56.720
<v Speaker 2>one of these things. It's all about copper wiring, So

0:19:56.760 --> 0:20:00.400
<v Speaker 2>the demand for copper from AI and data centers even

0:20:00.440 --> 0:20:02.960
<v Speaker 2>talked about two three years and now we're talking about

0:20:02.960 --> 0:20:06.440
<v Speaker 2>substantial amounts of copper needed for that. On top of that,

0:20:06.920 --> 0:20:10.120
<v Speaker 2>we have to take into account the unfortunate geopolitical situation

0:20:10.200 --> 0:20:13.480
<v Speaker 2>we're in right now where everybody is basically trying to

0:20:13.520 --> 0:20:17.240
<v Speaker 2>increase their defense expenditure, and actually that is incredibly metal

0:20:17.280 --> 0:20:21.720
<v Speaker 2>intensive because you think about aircraft carriers, bullets, tanks, it's

0:20:21.760 --> 0:20:24.879
<v Speaker 2>all metal and copper is in everything.

0:20:24.840 --> 0:20:27.639
<v Speaker 1>So well, it's even just the building of the factories,

0:20:27.720 --> 0:20:30.760
<v Speaker 1>isn't it. I mean, you know, let alone the products themselves,

0:20:30.760 --> 0:20:33.920
<v Speaker 1>but the building of the factories requires large amount.

0:20:35.000 --> 0:20:37.680
<v Speaker 2>Copper is literally everywhere. If I took a part of

0:20:37.760 --> 0:20:40.000
<v Speaker 2>this room we're sitting in, I'd find it pretty much

0:20:40.320 --> 0:20:43.280
<v Speaker 2>in everything that we're touching or looking at. But you're

0:20:43.280 --> 0:20:45.640
<v Speaker 2>exactly right, it's the building of factories as well, and

0:20:46.200 --> 0:20:50.760
<v Speaker 2>you have to add into account, of course, hopefully successful

0:20:50.800 --> 0:20:53.600
<v Speaker 2>resolution between Russia and Ukraine, and then we have to

0:20:53.720 --> 0:20:57.360
<v Speaker 2>rebuild Ukraine, and that's incredibly copper intensive. If you look

0:20:57.359 --> 0:21:00.000
<v Speaker 2>at countries in the past that have had to be rebuilt,

0:21:00.200 --> 0:21:02.000
<v Speaker 2>the amount of copy that you need to do that

0:21:02.560 --> 0:21:04.800
<v Speaker 2>is enormous. And you can look back even in World

0:21:04.880 --> 0:21:07.600
<v Speaker 2>War Two where we had to rebuild most of the world,

0:21:07.600 --> 0:21:10.719
<v Speaker 2>and that was incredibly copper intensive. So there's lots and

0:21:10.800 --> 0:21:13.439
<v Speaker 2>lots and lots of things going on in copper that

0:21:13.480 --> 0:21:16.440
<v Speaker 2>are supporting its price, not just one thing. So I'm

0:21:16.480 --> 0:21:20.160
<v Speaker 2>not sure that the cure to high prices is high prices,

0:21:20.200 --> 0:21:22.399
<v Speaker 2>which we generally say is the way that prices are

0:21:22.400 --> 0:21:26.680
<v Speaker 2>going to drop. I have a hard time seeing how

0:21:26.720 --> 0:21:30.120
<v Speaker 2>all of these things lose momentum in the short term

0:21:30.119 --> 0:21:33.520
<v Speaker 2>here for copper, and I see it continuing to rally.

0:21:33.880 --> 0:21:37.199
<v Speaker 1>Okay, and how could the supply of copper go up fast?

0:21:37.560 --> 0:21:40.560
<v Speaker 1>Well it can't, Well what could we can't? It actually can't.

0:21:40.640 --> 0:21:43.680
<v Speaker 1>There is no way to. I mean, obviously it's verging

0:21:43.720 --> 0:21:46.280
<v Speaker 1>on im possible to open new minds anywhere anymore, isn't

0:21:46.280 --> 0:21:50.120
<v Speaker 1>it because of environmental regulation, et cetera. And so if

0:21:50.160 --> 0:21:52.159
<v Speaker 1>you get one big mind that goes offline for a

0:21:52.240 --> 0:21:55.120
<v Speaker 1>short period or whatever, there's no way to compensate for that.

0:21:55.160 --> 0:21:58.080
<v Speaker 2>Well, we have we do have inventories within Shanghai, the

0:21:58.119 --> 0:22:01.480
<v Speaker 2>London Metal Exchange, the comics market in New York. There

0:22:01.520 --> 0:22:05.840
<v Speaker 2>are inventories and buffers there, but you know that's just

0:22:05.920 --> 0:22:08.440
<v Speaker 2>what they're there for as a moderate buffer in case

0:22:08.480 --> 0:22:11.400
<v Speaker 2>there's a short term shock. Really, but if we're talking

0:22:11.440 --> 0:22:15.280
<v Speaker 2>about long term needs for copper to cater all these

0:22:15.280 --> 0:22:21.439
<v Speaker 2>things we're talking about, defense, AI, rebuilding countries, electrification, you

0:22:21.520 --> 0:22:23.199
<v Speaker 2>need more copper to come out of the ground, and

0:22:23.240 --> 0:22:27.040
<v Speaker 2>it takes ages to start a new mine, as you mentioned,

0:22:27.080 --> 0:22:28.480
<v Speaker 2>for environmental reasons.

0:22:29.640 --> 0:22:32.639
<v Speaker 1>So should everyone have a couple of existing copper miners

0:22:32.640 --> 0:22:33.440
<v Speaker 1>in their portfolio.

0:22:33.880 --> 0:22:35.840
<v Speaker 2>I don't think it's a bad idea. I mean, this

0:22:35.960 --> 0:22:38.240
<v Speaker 2>is going to likely go on for quite some time. Obviously,

0:22:38.280 --> 0:22:40.960
<v Speaker 2>nothing goes up in a linear bottom left to top

0:22:41.080 --> 0:22:45.000
<v Speaker 2>right hand graph in terms of price performance. But it's

0:22:45.040 --> 0:22:47.520
<v Speaker 2>one of these things that I'm having a hard time

0:22:47.600 --> 0:22:50.640
<v Speaker 2>finding reasons as to why it would collapse other than

0:22:50.720 --> 0:22:54.240
<v Speaker 2>a recession or even a depression. But there's too many

0:22:54.280 --> 0:22:55.399
<v Speaker 2>things that are supporting it.

0:22:56.119 --> 0:23:00.240
<v Speaker 1>Yeah, although even in a recession there's defense facility. Is

0:23:00.240 --> 0:23:02.480
<v Speaker 1>it's just going to keep being rebuilt, aren't they That's

0:23:02.520 --> 0:23:04.240
<v Speaker 1>one thing, or recession is not going to stop.

0:23:04.440 --> 0:23:09.240
<v Speaker 2>Yeah, and let's get a bit macro here. You'd mentioned, well,

0:23:09.240 --> 0:23:12.200
<v Speaker 2>copper is one of my favorite commodities because we call

0:23:12.240 --> 0:23:14.480
<v Speaker 2>it Doctor Copper. It's the one thing that can forecast

0:23:14.520 --> 0:23:18.040
<v Speaker 2>macroeconomic outlook. It's very very good at that, but it's

0:23:18.080 --> 0:23:22.520
<v Speaker 2>also very very good at predicting a negative macroeconomic outlook

0:23:22.520 --> 0:23:24.479
<v Speaker 2>if we were running into a recession. You look at

0:23:24.480 --> 0:23:28.600
<v Speaker 2>copper prices historically, and we can go back hundreds of years, actually,

0:23:28.640 --> 0:23:30.680
<v Speaker 2>well at least dozens in the futures market. In the

0:23:30.680 --> 0:23:33.199
<v Speaker 2>spot market, we can go back hundreds of years. The

0:23:33.240 --> 0:23:36.080
<v Speaker 2>copper market is the one that collapses before anything else

0:23:36.200 --> 0:23:38.840
<v Speaker 2>when you're running into a recession. So I keep an

0:23:38.880 --> 0:23:41.720
<v Speaker 2>eye on that for that reason. But it's very resilient

0:23:41.800 --> 0:23:42.200
<v Speaker 2>right now.

0:23:42.359 --> 0:23:45.560
<v Speaker 1>Okay, let's talk about the other industrial metals briefly. And

0:23:45.600 --> 0:23:47.680
<v Speaker 1>one of the things I mentioned earlier was that in

0:23:47.720 --> 0:23:51.439
<v Speaker 1>this geopolitical environment, on top of the idea that everyone

0:23:51.520 --> 0:23:54.320
<v Speaker 1>is rebuilding their defense industries, people are also attempting to

0:23:54.400 --> 0:23:57.399
<v Speaker 1>rebuild their well in the West anyway, their manufacturing basis

0:23:57.480 --> 0:23:59.919
<v Speaker 1>to rebuild the infrastructure that maybe they've lost it over

0:23:59.920 --> 0:24:04.399
<v Speaker 1>the last twenty thirty years as a result of relentless globalization.

0:24:04.760 --> 0:24:07.560
<v Speaker 1>So if we've got that rebuilding and we've got people

0:24:07.720 --> 0:24:10.480
<v Speaker 1>slightly concerned for all sorts of geopolitical reasons about all

0:24:10.560 --> 0:24:13.240
<v Speaker 1>sorts of things, maybe stockpiling various metals. Is it the

0:24:13.280 --> 0:24:15.160
<v Speaker 1>case that we're not just talking about copper, We're talking

0:24:15.200 --> 0:24:18.639
<v Speaker 1>about the entire industrial metal base being in a fairly

0:24:18.680 --> 0:24:20.680
<v Speaker 1>intense ballmarket over the next few years.

0:24:20.960 --> 0:24:24.600
<v Speaker 2>Minimum, Yes, some of them more than others. Nicol has

0:24:24.600 --> 0:24:31.040
<v Speaker 2>always been a favorite as a potential ballmarket metal on

0:24:31.119 --> 0:24:33.960
<v Speaker 2>the back of electrification. Of course, Donald Trump and the

0:24:34.040 --> 0:24:37.200
<v Speaker 2>US administration right now kind of backing off from that

0:24:37.280 --> 0:24:41.040
<v Speaker 2>has made that market a little bit less exciting. Also,

0:24:41.160 --> 0:24:45.920
<v Speaker 2>nickel was previously losed a lot in primarily in building

0:24:46.119 --> 0:24:50.920
<v Speaker 2>as a component in the steel manufacturing. That's less exciting

0:24:51.000 --> 0:24:54.200
<v Speaker 2>right now because of the decline if you like, or

0:24:54.240 --> 0:24:58.120
<v Speaker 2>the slow down in China, So they're not as exposed

0:24:58.760 --> 0:25:02.120
<v Speaker 2>to all these very bullet elements as say something like copper.

0:25:04.040 --> 0:25:06.800
<v Speaker 2>So that's a bit of an outlier. But having said that,

0:25:06.840 --> 0:25:09.920
<v Speaker 2>you've hit on something very important because another aspect of

0:25:10.000 --> 0:25:12.760
<v Speaker 2>what is driving some of this bullish momentum, and maybe

0:25:12.760 --> 0:25:15.720
<v Speaker 2>we can get into silver a little bit later.

0:25:15.640 --> 0:25:17.720
<v Speaker 1>Is oh, we are definitely on our way to talking

0:25:17.760 --> 0:25:20.720
<v Speaker 1>about zilver. I'm literally gearing up for that right now.

0:25:20.560 --> 0:25:25.639
<v Speaker 2>It's about stockpiling, right, critical material stockpiling. So you know,

0:25:25.760 --> 0:25:28.439
<v Speaker 2>to go back to oil, what countries generally do with

0:25:28.680 --> 0:25:33.480
<v Speaker 2>oil in terms of stockpiling is that they collect import

0:25:33.600 --> 0:25:36.560
<v Speaker 2>ninety days worth of oil, put it in storage, and

0:25:36.600 --> 0:25:40.320
<v Speaker 2>that's called their strategic petroleum reserve. That's how much they're

0:25:40.320 --> 0:25:43.399
<v Speaker 2>supposed to hold in case something goes wrong. We don't

0:25:43.440 --> 0:25:46.560
<v Speaker 2>have things like that for base metals. And so if

0:25:46.600 --> 0:25:50.840
<v Speaker 2>one was to look at the countries that import things

0:25:50.880 --> 0:25:55.879
<v Speaker 2>like nickel and zinc and lead, aluminum, copper, et cetera,

0:25:56.040 --> 0:25:58.439
<v Speaker 2>and you said, okay, well, what if they decided to

0:25:58.440 --> 0:26:01.160
<v Speaker 2>do the same thing with those metal that they do

0:26:01.240 --> 0:26:05.119
<v Speaker 2>with the energy complex, notably oil, and by ninety days

0:26:05.119 --> 0:26:08.280
<v Speaker 2>worth of cover of what they normally import, you'd be

0:26:08.359 --> 0:26:12.120
<v Speaker 2>talking about a tremendous amount of material that would put

0:26:12.119 --> 0:26:15.520
<v Speaker 2>these markets in big deficits and that would would increase

0:26:15.560 --> 0:26:18.679
<v Speaker 2>the prices. So we're not there yet in terms of

0:26:19.400 --> 0:26:22.800
<v Speaker 2>critical material and the impact on things like zinc and lead,

0:26:22.840 --> 0:26:26.199
<v Speaker 2>these smaller markets, but definitely copper and silver come up

0:26:26.240 --> 0:26:27.399
<v Speaker 2>in this conversation.

0:26:28.400 --> 0:26:31.800
<v Speaker 1>Yeah, okay, well let's go on to silver. That one

0:26:31.840 --> 0:26:34.880
<v Speaker 1>of our favorite topics on this podcast. My co host

0:26:34.960 --> 0:26:37.960
<v Speaker 1>John Steppek is mildly obsessed by silver, So I'm sorry

0:26:38.000 --> 0:26:39.399
<v Speaker 1>he's not here to talk to you about it, but

0:26:39.720 --> 0:26:42.880
<v Speaker 1>let me do it for him. So, given everything we've

0:26:42.920 --> 0:26:47.119
<v Speaker 1>just said, but also given these stunningly sharp rise in

0:26:47.280 --> 0:26:50.399
<v Speaker 1>the silver price, is that sustainable? Is this a bubble?

0:26:50.600 --> 0:26:52.520
<v Speaker 1>And if it is a bubble, is it a rational bubble?

0:26:52.600 --> 0:26:53.760
<v Speaker 1>Or is this not a bubble at all?

0:26:53.880 --> 0:26:56.359
<v Speaker 2>Well, it's fascinating you say that. We try and be

0:26:56.480 --> 0:27:00.919
<v Speaker 2>very quantity in our analytics at SOB. We've got a

0:27:00.960 --> 0:27:04.919
<v Speaker 2>model for almost everything, including bubbles. Is a particular market

0:27:04.920 --> 0:27:07.479
<v Speaker 2>in a bubble? So I test these things out all

0:27:07.480 --> 0:27:09.160
<v Speaker 2>the time, and a couple of weeks ago we ran

0:27:09.200 --> 0:27:12.600
<v Speaker 2>it through our silver complex and it churned out the

0:27:12.640 --> 0:27:15.040
<v Speaker 2>fact that we were in a bubble. And I thought, well,

0:27:15.040 --> 0:27:17.639
<v Speaker 2>hang on a second, have we been in a situation

0:27:17.840 --> 0:27:20.359
<v Speaker 2>like we're in right now for silver compared to history?

0:27:20.359 --> 0:27:23.920
<v Speaker 2>And the answer is no. What's going on there is

0:27:24.040 --> 0:27:27.480
<v Speaker 2>the fact that silver, we have to remember, is basically

0:27:27.520 --> 0:27:31.080
<v Speaker 2>fifty percent industrial and it's fifty percent precious. It doesn't

0:27:31.160 --> 0:27:33.520
<v Speaker 2>move up and down with gold, but it can't move

0:27:33.800 --> 0:27:37.040
<v Speaker 2>in a separate direction in the long term. So the

0:27:37.080 --> 0:27:40.480
<v Speaker 2>gold silver ratio is fairly volatile, which means that they

0:27:40.480 --> 0:27:44.040
<v Speaker 2>do have different paths. But generally speaking, silver does do

0:27:44.119 --> 0:27:47.119
<v Speaker 2>what gold does. It's the market is ten times smaller

0:27:47.160 --> 0:27:49.840
<v Speaker 2>than the gold market, which means it's way more volatile.

0:27:49.840 --> 0:27:52.679
<v Speaker 2>The way I explained the silver market, it's it's just

0:27:52.800 --> 0:27:55.119
<v Speaker 2>like gold but on steroids. Basically, if gold's going to

0:27:55.119 --> 0:27:56.840
<v Speaker 2>go up, it's going to go up more. If gold's

0:27:56.880 --> 0:27:58.600
<v Speaker 2>going to go down, it's going to go down with gold,

0:27:58.640 --> 0:28:00.760
<v Speaker 2>but buy more. But I have to add on top

0:28:00.800 --> 0:28:03.919
<v Speaker 2>the industrial complex. Now, what's going on with silver, of course,

0:28:04.400 --> 0:28:06.320
<v Speaker 2>is the fact that we've been running into three years

0:28:06.359 --> 0:28:10.160
<v Speaker 2>of deficit. Now, before we got all excited about investing

0:28:10.200 --> 0:28:14.160
<v Speaker 2>in precious metals and de dollarization, central bank buying, etc.

0:28:14.480 --> 0:28:17.760
<v Speaker 2>Nobody really cared about the small deficits in silver. But

0:28:17.920 --> 0:28:21.359
<v Speaker 2>once you start getting a leg up in silver prices

0:28:21.440 --> 0:28:25.120
<v Speaker 2>and ETF buying and movements of silver from one location

0:28:25.200 --> 0:28:29.320
<v Speaker 2>to another because of fears of tariff impositions, then all

0:28:29.359 --> 0:28:33.080
<v Speaker 2>of a sudden, the inventory of silver becomes incredibly important.

0:28:33.560 --> 0:28:35.760
<v Speaker 2>And when you're in the market of deficits and you're

0:28:35.800 --> 0:28:39.280
<v Speaker 2>expecting to have more deficits going forward, that's the support

0:28:39.320 --> 0:28:42.640
<v Speaker 2>behind silver Now, silver's very volatile. Is it going to

0:28:42.680 --> 0:28:45.640
<v Speaker 2>come off? Yes, of course it will. Will it continue

0:28:45.640 --> 0:28:47.080
<v Speaker 2>to rise? I think it will.

0:28:47.760 --> 0:28:49.440
<v Speaker 1>Okay, that's what we want to hear.

0:28:50.440 --> 0:28:54.360
<v Speaker 2>And gold gold I have actually more conviction on because

0:28:54.400 --> 0:28:57.320
<v Speaker 2>it's a much more solid market in terms of liquidity.

0:28:58.280 --> 0:29:00.920
<v Speaker 2>And of course central banks don't really get involved in

0:29:01.000 --> 0:29:05.000
<v Speaker 2>silver at all, but they're very much in the gold complex.

0:29:05.080 --> 0:29:09.080
<v Speaker 2>So I took a very interesting experiment because nobody really

0:29:09.120 --> 0:29:11.880
<v Speaker 2>knows how much more central banks are going to buy,

0:29:11.960 --> 0:29:15.320
<v Speaker 2>how long this de dollarization story is going to continue.

0:29:15.320 --> 0:29:18.200
<v Speaker 2>But if you take a list of all the central

0:29:18.240 --> 0:29:21.240
<v Speaker 2>banks around the world and you look at see which

0:29:21.280 --> 0:29:24.480
<v Speaker 2>central banks are holding lower amounts of gold relative to

0:29:24.480 --> 0:29:27.280
<v Speaker 2>their total reserves. So some central banks, like the US

0:29:27.800 --> 0:29:30.800
<v Speaker 2>has eight thousand tons of gold, China has two three

0:29:30.880 --> 0:29:33.240
<v Speaker 2>hundred tons of gold. So these are pretty big. But

0:29:33.280 --> 0:29:34.840
<v Speaker 2>the really important question.

0:29:34.720 --> 0:29:36.520
<v Speaker 1>And we're sure about those numbers, are.

0:29:36.440 --> 0:29:39.560
<v Speaker 2>We No, we're not sure about the China number. These

0:29:39.600 --> 0:29:43.880
<v Speaker 2>are self reported by China to the IMF. We keep

0:29:43.960 --> 0:29:47.719
<v Speaker 2>track of imports into China from London. We look at

0:29:47.760 --> 0:29:51.160
<v Speaker 2>what they say they've bought, etc. So we go with

0:29:51.240 --> 0:29:53.920
<v Speaker 2>the stated number, but knowing there's a little bit of

0:29:54.720 --> 0:29:58.160
<v Speaker 2>probably uncertainty there, But I think the important thing is

0:29:58.160 --> 0:29:59.800
<v Speaker 2>is that even if you take that two thousand and

0:29:59.800 --> 0:30:03.880
<v Speaker 2>three one hundred ton number for China, that is roughly

0:30:04.400 --> 0:30:07.360
<v Speaker 2>six percent of their total reserves. So if you're off

0:30:07.400 --> 0:30:12.240
<v Speaker 2>by another two thousand tons, you're still below twenty percent

0:30:12.240 --> 0:30:14.840
<v Speaker 2>of total reserves. And that's what most central banks are

0:30:14.840 --> 0:30:19.160
<v Speaker 2>aiming to accumulate. So if you take the top, say

0:30:19.240 --> 0:30:22.440
<v Speaker 2>fifty central banks, and you rank order them by the

0:30:22.480 --> 0:30:24.840
<v Speaker 2>amount of gold that they're holding as a percent of

0:30:24.880 --> 0:30:27.720
<v Speaker 2>total reserves, and you exclude the ones that are holding

0:30:27.760 --> 0:30:30.400
<v Speaker 2>a lot of gold, and you're left with the remainder,

0:30:30.880 --> 0:30:34.440
<v Speaker 2>and you ask this one question, what if those central

0:30:34.520 --> 0:30:38.440
<v Speaker 2>banks moved one percent of their total reserves that are

0:30:38.480 --> 0:30:42.600
<v Speaker 2>not gold into gold, just one percent, And you looked

0:30:42.600 --> 0:30:45.920
<v Speaker 2>at all these different countries, whether it's the Philippines, Japan, China,

0:30:45.960 --> 0:30:48.880
<v Speaker 2>et cetera. These are the countries that have low relative reserves,

0:30:49.760 --> 0:30:51.720
<v Speaker 2>and you assume that they all did that, then you'd

0:30:51.720 --> 0:30:56.440
<v Speaker 2>be talking close to one thousand tons of gold being demanded. Now, remember,

0:30:56.640 --> 0:31:00.720
<v Speaker 2>in any given year, normally central banks by about seven

0:31:00.800 --> 0:31:04.080
<v Speaker 2>hundred tons, So if they made this incremental shift to

0:31:04.120 --> 0:31:07.600
<v Speaker 2>one thousand tons, in addition to the seven hundred that's

0:31:07.680 --> 0:31:12.040
<v Speaker 2>normally being purchased, that mechanically would lift gold prices about

0:31:12.040 --> 0:31:13.880
<v Speaker 2>one thousand dollars an ounce.

0:31:14.360 --> 0:31:17.040
<v Speaker 1>Okay, which would make the share prices of the miners

0:31:17.080 --> 0:31:19.880
<v Speaker 1>go even more berserk than they've gone already.

0:31:19.560 --> 0:31:22.600
<v Speaker 2>Even more berserk. And by the way, we look at

0:31:22.600 --> 0:31:26.080
<v Speaker 2>the cost of production of all the different miners, and

0:31:26.120 --> 0:31:28.760
<v Speaker 2>they are all making money. There is not one gold

0:31:28.840 --> 0:31:30.920
<v Speaker 2>mine that is making no money anymore.

0:31:31.600 --> 0:31:35.880
<v Speaker 1>Makes a pleasant change, doesn't it. It does so from

0:31:35.880 --> 0:31:38.120
<v Speaker 1>your point of view, it is not too late to

0:31:38.280 --> 0:31:40.840
<v Speaker 1>buy silver, to buy gold, or indeed to buy the

0:31:40.880 --> 0:31:42.200
<v Speaker 1>silver or the gold miners.

0:31:42.440 --> 0:31:45.080
<v Speaker 2>I don't think it is. I mean, our house view

0:31:45.440 --> 0:31:48.040
<v Speaker 2>is that by the end of this year, gold is

0:31:48.040 --> 0:31:49.840
<v Speaker 2>going to be at five thousand dollars an ounce. Now,

0:31:49.880 --> 0:31:52.320
<v Speaker 2>of course, we said that when gold is at four thousand.

0:31:52.880 --> 0:31:55.640
<v Speaker 2>Now we're up to almost four thousand, five hundred. I

0:31:55.680 --> 0:31:58.120
<v Speaker 2>have a feeling, but I'm not sure when this will

0:31:58.120 --> 0:31:59.760
<v Speaker 2>be that I'm going to have to adjust that up again.

0:32:00.120 --> 0:32:01.640
<v Speaker 2>If I adjust gold up, I'm going to have to

0:32:01.680 --> 0:32:02.560
<v Speaker 2>adjust silver up.

0:32:03.480 --> 0:32:05.520
<v Speaker 1>Can you see any point, any point in time in

0:32:05.520 --> 0:32:08.920
<v Speaker 1>which the central banks would hold bitcoin as a reserve asset.

0:32:09.760 --> 0:32:13.160
<v Speaker 2>That's a fabulous question. I have devoted a bit of

0:32:13.160 --> 0:32:15.200
<v Speaker 2>time and attention of going to a variety of different

0:32:15.240 --> 0:32:18.520
<v Speaker 2>central bank websites and looking at what their policies are

0:32:18.560 --> 0:32:21.440
<v Speaker 2>on this, their statements, what they say they have, what

0:32:21.520 --> 0:32:24.240
<v Speaker 2>they might do. I found two central banks that made

0:32:24.280 --> 0:32:28.000
<v Speaker 2>a statement last year, the Czech Republic and Kazakhstan, that

0:32:28.120 --> 0:32:34.640
<v Speaker 2>said they might consider holding bitcoin or crypto in their

0:32:34.680 --> 0:32:38.800
<v Speaker 2>portfolios alongside gold. But the key question was might, and

0:32:39.160 --> 0:32:42.040
<v Speaker 2>I think it was the Czech Republic central Bank that

0:32:42.120 --> 0:32:43.840
<v Speaker 2>said if they did that, it would be a maximum

0:32:43.880 --> 0:32:46.600
<v Speaker 2>of five percent. So it's a good question, but so

0:32:46.760 --> 0:32:49.400
<v Speaker 2>far I don't I'm not I'm not concerned about.

0:32:49.200 --> 0:32:52.040
<v Speaker 1>That, Okay, So that is not a risk to your

0:32:52.080 --> 0:32:55.240
<v Speaker 1>outlook for gold. What is the risk to your view

0:32:55.320 --> 0:32:57.720
<v Speaker 1>on gold? What would turn it around?

0:32:57.880 --> 0:33:00.600
<v Speaker 2>A month two months ago, I was asked the question,

0:33:00.800 --> 0:33:03.400
<v Speaker 2>you know, obviously with higher prices, central banks are going

0:33:03.440 --> 0:33:07.240
<v Speaker 2>to stop buying because it just is just way too high.

0:33:07.280 --> 0:33:10.240
<v Speaker 2>And so I looked at sort of elasticities of response

0:33:10.320 --> 0:33:14.320
<v Speaker 2>of prices to demand across jewelry, across central bank buying,

0:33:14.360 --> 0:33:18.280
<v Speaker 2>across etf buying, and it's all basically broken with the

0:33:18.320 --> 0:33:21.560
<v Speaker 2>exception of jewelry demand elasticity, meaning if prices go up,

0:33:21.720 --> 0:33:25.040
<v Speaker 2>people buy less jewelry. That is a very strong relationship.

0:33:25.440 --> 0:33:28.640
<v Speaker 2>It's broken with central banks and ETF buying because those

0:33:28.760 --> 0:33:32.400
<v Speaker 2>are the reasons why gold prices go up. So it's

0:33:32.520 --> 0:33:35.520
<v Speaker 2>hard to think about an elasticity response when that is

0:33:35.520 --> 0:33:37.680
<v Speaker 2>the reason why it goes up. So they are the

0:33:37.760 --> 0:33:41.120
<v Speaker 2>causal influence. They have a positive elasticity, which means gold

0:33:41.120 --> 0:33:45.120
<v Speaker 2>prices they buy more. But so far central banks have

0:33:45.200 --> 0:33:48.360
<v Speaker 2>not reversed course on their statements as to how they

0:33:48.360 --> 0:33:51.000
<v Speaker 2>accumulate their gold. They still say that this is a

0:33:51.040 --> 0:33:53.800
<v Speaker 2>very strategic thing. It's not really about the price of

0:33:53.840 --> 0:33:57.760
<v Speaker 2>gold right now. That's my concern is if we see

0:33:57.760 --> 0:34:00.760
<v Speaker 2>a reversal in central bank buying. I do check on

0:34:00.800 --> 0:34:05.400
<v Speaker 2>it every month using HMRC gold export data out of

0:34:05.880 --> 0:34:09.560
<v Speaker 2>the UK into places like China. It has slowed down,

0:34:09.680 --> 0:34:13.560
<v Speaker 2>I will admit that compared to say this time last year.

0:34:14.200 --> 0:34:17.640
<v Speaker 2>I think if I see another one or two or

0:34:17.640 --> 0:34:21.799
<v Speaker 2>three months of central bank buying decline, as proxied by

0:34:22.160 --> 0:34:23.880
<v Speaker 2>exports out of the UK, then I'm going to have

0:34:23.960 --> 0:34:27.000
<v Speaker 2>to reevaluate my thinking on the role of central banks

0:34:27.000 --> 0:34:29.399
<v Speaker 2>and gold demand. For twenty twenty six, but so far

0:34:29.800 --> 0:34:32.480
<v Speaker 2>haven't seen that. The other thing that people often ask

0:34:32.520 --> 0:34:35.319
<v Speaker 2>about is what if we saw a massive reduction in

0:34:35.400 --> 0:34:40.040
<v Speaker 2>reduction in uncertainty around the world, geopolitical uncertainty, because those

0:34:40.080 --> 0:34:43.080
<v Speaker 2>things are very highly linked to ETF flows. So the

0:34:43.120 --> 0:34:45.440
<v Speaker 2>average person on the street, like you and I, we

0:34:45.480 --> 0:34:47.400
<v Speaker 2>don't go out and buy massive gold bars like the

0:34:47.440 --> 0:34:50.040
<v Speaker 2>central banks do. The easiest way of us access in

0:34:50.080 --> 0:34:53.120
<v Speaker 2>gold is to buy gold ETF that's backed by gold,

0:34:53.360 --> 0:34:57.080
<v Speaker 2>and the relationship between uncertainty and ETF flows is through

0:34:57.120 --> 0:35:00.520
<v Speaker 2>the roof. So uncertainty is measured in a variety of ways.

0:35:00.520 --> 0:35:04.680
<v Speaker 2>There's lots of indices out there, trade uncertainty, geopolitical uncertainty,

0:35:04.680 --> 0:35:06.359
<v Speaker 2>et cetera, et cetera. You can go on the web

0:35:06.760 --> 0:35:10.759
<v Speaker 2>and find these things everywhere. My favorite is Economic Policy Uncertainty.

0:35:10.800 --> 0:35:13.759
<v Speaker 2>It's an uncertainty index developed by some professors at the

0:35:13.800 --> 0:35:17.160
<v Speaker 2>University of Chicago. You get daily versions, weekly versions, and

0:35:17.160 --> 0:35:19.840
<v Speaker 2>if you plot it alongside ETF flows, they go up

0:35:19.880 --> 0:35:23.560
<v Speaker 2>and down together. So the question is is uncertainty likely

0:35:23.600 --> 0:35:26.480
<v Speaker 2>to come down? And my answer is no, not at

0:35:26.560 --> 0:35:27.640
<v Speaker 2>least in the next three years.

0:35:27.880 --> 0:35:32.320
<v Speaker 1>I can see where you might feel like that. Yes, listen,

0:35:32.600 --> 0:35:35.040
<v Speaker 1>let's go back if you if you don't mind too

0:35:35.520 --> 0:35:38.840
<v Speaker 1>energy And how is it best for an ordinary passing

0:35:38.880 --> 0:35:40.759
<v Speaker 1>to invest in the energy markets at the moment? I

0:35:40.800 --> 0:35:43.800
<v Speaker 1>mean it feels like it's very very hard to forcast

0:35:43.840 --> 0:35:46.279
<v Speaker 1>the oil price. I mean you said that forecasts are

0:35:46.360 --> 0:35:48.040
<v Speaker 1>all over the blaze and nobody even knows whether the

0:35:48.040 --> 0:35:49.520
<v Speaker 1>demand is going to be up or down over the

0:35:49.560 --> 0:35:53.080
<v Speaker 1>next decade, etc. So if you want to be invested

0:35:53.440 --> 0:35:57.280
<v Speaker 1>somehow in energy, where do you go? I mean, honestly,

0:35:57.280 --> 0:36:00.160
<v Speaker 1>obviously copper is a good answer, but an answer it

0:36:00.200 --> 0:36:00.720
<v Speaker 1>isn't copper.

0:36:00.880 --> 0:36:06.600
<v Speaker 2>Yeah, well, so for you know, the simplest way, simplest

0:36:06.960 --> 0:36:09.800
<v Speaker 2>I use inverted commas on that is to access the

0:36:09.920 --> 0:36:13.600
<v Speaker 2>energy complex through things like ETFs or even if you're

0:36:13.600 --> 0:36:17.200
<v Speaker 2>a little bit more sophisticated, buying or selling futures or

0:36:17.239 --> 0:36:18.360
<v Speaker 2>options on futures.

0:36:18.680 --> 0:36:20.160
<v Speaker 1>The problem, you know, we don't want to do that.

0:36:20.239 --> 0:36:22.560
<v Speaker 1>We absolutely don't want to do that. We are simple

0:36:22.600 --> 0:36:25.359
<v Speaker 1>people here with simple people. We want to buy an

0:36:25.400 --> 0:36:28.040
<v Speaker 1>equity or we want to buy any ETFEA and we

0:36:28.080 --> 0:36:31.040
<v Speaker 1>want to buy a straightforward, properly exposed to the physical

0:36:31.080 --> 0:36:33.120
<v Speaker 1>ETF nothing else with Yeah.

0:36:32.880 --> 0:36:34.880
<v Speaker 2>I mean this is this is probably the most sensible

0:36:34.880 --> 0:36:37.160
<v Speaker 2>way of accessing these markets. Now, I do have to

0:36:37.160 --> 0:36:39.840
<v Speaker 2>be bearish on oil going forward in case. I didn't

0:36:39.840 --> 0:36:41.120
<v Speaker 2>mention that before, so I wouldn't.

0:36:41.120 --> 0:36:43.080
<v Speaker 1>Probably you weren't quite clear enough on that. That was

0:36:43.080 --> 0:36:46.320
<v Speaker 1>pretty much what the question was. You were totally clearly there.

0:36:46.239 --> 0:36:49.319
<v Speaker 2>Is yes, So I'm not sure I would. I would

0:36:49.360 --> 0:36:51.440
<v Speaker 2>recommend that to people, But if you were in the

0:36:51.480 --> 0:36:54.919
<v Speaker 2>interest of getting access in that, I think going through

0:36:54.960 --> 0:36:58.919
<v Speaker 2>the energy companies themselves, or at least an ETF link

0:36:59.000 --> 0:37:01.399
<v Speaker 2>to those companies the most sensible. But I would stay

0:37:01.440 --> 0:37:05.440
<v Speaker 2>away from the actual flat price of energy through futures

0:37:05.440 --> 0:37:08.960
<v Speaker 2>and options because we have funny shaped curves the forward curve,

0:37:09.000 --> 0:37:10.920
<v Speaker 2>and if you invest in the front, you're going to

0:37:11.000 --> 0:37:13.160
<v Speaker 2>lose money as it rolls down the curve, et cetera.

0:37:13.280 --> 0:37:14.040
<v Speaker 2>So stay away from that.

0:37:14.680 --> 0:37:17.240
<v Speaker 1>We don't do that. What about the oil services companies

0:37:17.239 --> 0:37:19.279
<v Speaker 1>in the US? Now they for this for this very

0:37:19.320 --> 0:37:21.480
<v Speaker 1>reason things we were discussing Eliot with Venezuelan and they

0:37:21.520 --> 0:37:25.360
<v Speaker 1>had bit of a pop after the incident. What about those.

0:37:25.440 --> 0:37:28.319
<v Speaker 2>I'm not an equity analyst, so I tend to stay

0:37:28.320 --> 0:37:32.480
<v Speaker 2>away with making judgments on particular sectors. Within energy and

0:37:32.520 --> 0:37:36.400
<v Speaker 2>particularly the companies themselves. But you'd have to imagine, you know,

0:37:36.680 --> 0:37:40.800
<v Speaker 2>aside from Venezuela and potential opportunities there for using US

0:37:41.480 --> 0:37:44.880
<v Speaker 2>energy services companies. You know, if you're talking about a

0:37:45.000 --> 0:37:46.799
<v Speaker 2>market that is going to go through some sort of

0:37:46.840 --> 0:37:50.000
<v Speaker 2>bearish cycle, which is what I think it's going to

0:37:50.000 --> 0:37:52.280
<v Speaker 2>do in the next year, at least maybe two years,

0:37:52.760 --> 0:37:55.839
<v Speaker 2>is I'm not sure I would look at those sectors, Okay.

0:37:55.760 --> 0:37:57.360
<v Speaker 1>And the bet can we just go back briefly to

0:37:57.360 --> 0:37:59.319
<v Speaker 1>the bear's cycle, because I don't think we completely cover

0:37:59.400 --> 0:38:01.760
<v Speaker 1>up and we will talking about oil that is based

0:38:01.800 --> 0:38:04.560
<v Speaker 1>on what because we don't expect demand of all off

0:38:04.600 --> 0:38:05.680
<v Speaker 1>over the next couple of years.

0:38:05.680 --> 0:38:10.359
<v Speaker 2>But you yeah, well, we don't expect demand to come off.

0:38:10.440 --> 0:38:12.440
<v Speaker 2>It's not going to go negative, but the rate of

0:38:12.480 --> 0:38:15.359
<v Speaker 2>growth is slowing every year, and it will slow all

0:38:15.360 --> 0:38:17.360
<v Speaker 2>the way up to one hundred and thirteen million barrels

0:38:17.360 --> 0:38:20.000
<v Speaker 2>a day, as I mentioned before. But it's about the

0:38:20.040 --> 0:38:25.800
<v Speaker 2>supply side. So OPEK has been cutting oil production slash

0:38:25.840 --> 0:38:29.680
<v Speaker 2>exports to keep prices at a high enough level so

0:38:29.920 --> 0:38:33.000
<v Speaker 2>the cost of extraction in the open members is fully covered,

0:38:33.000 --> 0:38:36.840
<v Speaker 2>but also the social costs within each country is covered.

0:38:37.320 --> 0:38:40.480
<v Speaker 2>But at some point they've given up and they've said, Okay,

0:38:40.560 --> 0:38:43.080
<v Speaker 2>we're going to produce more because we want more of

0:38:43.080 --> 0:38:46.840
<v Speaker 2>the volume that we've been holding back on, which enables

0:38:46.880 --> 0:38:50.440
<v Speaker 2>places like Brazil, Guyana, the US and Canada to enjoy

0:38:50.480 --> 0:38:54.319
<v Speaker 2>that incremental demand growth by adding that supply. So they've

0:38:54.320 --> 0:38:56.399
<v Speaker 2>reversed course and said we're not doing that anymore. We're

0:38:56.400 --> 0:38:58.600
<v Speaker 2>bringing back oil into the market. So when you add

0:38:58.640 --> 0:39:02.600
<v Speaker 2>in what the develop market is producing, when you add

0:39:02.600 --> 0:39:05.160
<v Speaker 2>in what Opek is putting back into the market, and

0:39:05.239 --> 0:39:07.800
<v Speaker 2>then you subtract from that the incremental demand that we

0:39:07.880 --> 0:39:10.759
<v Speaker 2>might get next year, we end up with a surplus

0:39:10.800 --> 0:39:14.960
<v Speaker 2>of about three million barrels a day of on one

0:39:15.000 --> 0:39:17.040
<v Speaker 2>hundred and four million barrel a day market, which is

0:39:17.080 --> 0:39:20.520
<v Speaker 2>gigantic as a percentage. And because of that, that means

0:39:20.520 --> 0:39:24.399
<v Speaker 2>that inventories build around the world. They swell up. We've

0:39:24.400 --> 0:39:26.879
<v Speaker 2>got plenty of oil, and prices collapse. The reason why

0:39:26.880 --> 0:39:29.200
<v Speaker 2>they haven't collapsed right now is because China has been

0:39:29.200 --> 0:39:32.239
<v Speaker 2>buying all for its strategic petroleum reserve, which is a

0:39:32.280 --> 0:39:36.600
<v Speaker 2>whole different conversation in itself. But when they stop, that's

0:39:36.600 --> 0:39:39.920
<v Speaker 2>when inventories kind of grow rapidly, and that's when prices

0:39:39.960 --> 0:39:40.759
<v Speaker 2>come off next year.

0:39:41.600 --> 0:39:45.200
<v Speaker 1>Okay, so this is absolutely fabulous news if we think

0:39:45.239 --> 0:39:49.400
<v Speaker 1>as we do that, you know, all activity is energy transformed.

0:39:49.480 --> 0:39:52.719
<v Speaker 1>The cheaper energy is the better for everybody. And we

0:39:52.800 --> 0:39:55.919
<v Speaker 1>know so many horrible recessions have been prompted by high

0:39:55.920 --> 0:40:00.799
<v Speaker 1>oil prices. Seeing oil prices go lower and exactly high

0:40:00.840 --> 0:40:03.359
<v Speaker 1>in historical context at the moment, seeing them going lower

0:40:03.480 --> 0:40:06.840
<v Speaker 1>will be absolutely fabulous for global economic growth.

0:40:06.960 --> 0:40:09.520
<v Speaker 2>It totally well. I mean, you know, I'm not talking

0:40:09.520 --> 0:40:12.120
<v Speaker 2>for a collapse in all prices. Our official forecast as

0:40:12.160 --> 0:40:14.720
<v Speaker 2>it goes for Brent anyway, which is the more global market,

0:40:15.080 --> 0:40:17.000
<v Speaker 2>to go to about fifty dollars by the end of

0:40:17.040 --> 0:40:19.359
<v Speaker 2>the year. And we're at sixty right now. So we're

0:40:19.360 --> 0:40:21.880
<v Speaker 2>not talking about a twenty or a thirty percent decline.

0:40:22.040 --> 0:40:24.279
<v Speaker 2>And if I turn around and I tell my economists, hey,

0:40:24.360 --> 0:40:26.279
<v Speaker 2>I've got some good news oils coming down, what does

0:40:26.320 --> 0:40:29.120
<v Speaker 2>that mean for inflation? What does this mean for GDP growth?

0:40:29.120 --> 0:40:31.640
<v Speaker 2>They don't get overly excited by the level that I've

0:40:31.719 --> 0:40:34.320
<v Speaker 2>just explained there, but obviously at the margin, this is

0:40:34.440 --> 0:40:36.120
<v Speaker 2>very positive for people's pockets.

0:40:36.400 --> 0:40:39.319
<v Speaker 1>Excellent, brilliant, Thank you, Michael. See how we are ended

0:40:39.320 --> 0:40:41.080
<v Speaker 1>there on a positive note, see how that works.

0:40:41.200 --> 0:40:42.160
<v Speaker 2>We're done.

0:40:42.480 --> 0:40:48.839
<v Speaker 1>We are Thanks for listening to this week's Marrying Talks Money.

0:40:48.880 --> 0:40:51.560
<v Speaker 1>If you like us, show, rate, review, and subscribe wherever

0:40:51.600 --> 0:40:54.080
<v Speaker 1>you listen to podcasts and keep sending questions or comments

0:40:54.120 --> 0:40:56.759
<v Speaker 1>and Merrin Money at Bloomberg dot net. Also follow me

0:40:56.800 --> 0:40:59.520
<v Speaker 1>and John on Twitter or x I'm at marinsw and

0:40:59.600 --> 0:41:02.440
<v Speaker 1>John is John on The Scorest Effect. This episode was

0:41:02.440 --> 0:41:05.200
<v Speaker 1>hosted by me baron Sunset What. It was produced by

0:41:05.239 --> 0:41:08.600
<v Speaker 1>Samasadi and Moses and sound designed by Blake Mabels and

0:41:08.680 --> 0:41:12.960
<v Speaker 1>Aaron Casper. And special thanks of course to Michael Hay