WEBVTT - Pierre Andurand on How We Might Get $200 a Barrel Oil 0:00:05.840 --> 0:00:09.119 Hello, and welcome to another episode of the All Thoughts Podcast. 0:00:09.200 --> 0:00:12.280 I'm Tracy Allaway and I'm Joe. Isn't the Joe. Have 0:00:12.480 --> 0:00:15.440 you looked at the price of oil recently? No? Is it? 0:00:15.480 --> 0:00:18.200 Is it doing something? Has oil been moving lately? I 0:00:18.200 --> 0:00:21.840 don't know, you hadn't noticed. Yes, it has. Um I 0:00:21.880 --> 0:00:25.119 think you know. We're recording this on March tenth. But 0:00:25.320 --> 0:00:28.000 just in the past couple of days, oil spiked almost 0:00:28.880 --> 0:00:32.599 and then came down by almost as well the next day. 0:00:32.680 --> 0:00:37.680 So just incredibly volatile times for commodities across the complex. Yes. 0:00:37.800 --> 0:00:41.000 In fact, I think within the last week we both 0:00:41.040 --> 0:00:44.040 had the biggest update for the Bloomberg Commodity Spot Index 0:00:44.120 --> 0:00:46.800 its two thousand eight and the biggest down day for 0:00:46.840 --> 0:00:50.760 the same index's two thousand eight. Unreal volatility because you 0:00:50.840 --> 0:00:54.840 have the combination of an extremely tight market across the board, 0:00:55.520 --> 0:01:00.720 combined with geopolitical events that of course are inherent the uncertain, 0:01:00.760 --> 0:01:03.960 non linear, and unpredictable. Yeah, and you kind of have 0:01:04.040 --> 0:01:07.160 to wonder what it's actually like to be trading commodities 0:01:07.240 --> 0:01:09.600 at the moment, because not only do you have this 0:01:09.760 --> 0:01:12.800 massive price volatility, but you also have everything that's going 0:01:12.840 --> 0:01:17.880 on in the background with financing and exchanges, them having 0:01:17.920 --> 0:01:20.520 to deal with this intense volatility and sometimes you know, 0:01:20.640 --> 0:01:23.400 sort of um canceling trades, which is something we saw 0:01:23.400 --> 0:01:26.800 from the London Medal. Exchange of financing has become an 0:01:26.840 --> 0:01:30.840 issue people taking physically physical delivery of stuff. Is there 0:01:30.840 --> 0:01:33.920 actually going to be enough to settle some of these contracts. 0:01:34.120 --> 0:01:36.480 There's so many questions around the space right now, in 0:01:36.520 --> 0:01:40.360 addition to actually what's going on with Russia and Ukraine. Yeah, 0:01:41.600 --> 0:01:45.000 the degrees of uncertainty or the vectors of uncertainty, just 0:01:45.360 --> 0:01:48.720 because there's the pure price question. Then as you mentioned, 0:01:49.000 --> 0:01:52.920 the physical availability, the ability to move the oil, the 0:01:52.960 --> 0:02:00.560 interaction between oil and sanctions or self sanctions unbelievably complicated times. Well, 0:02:00.600 --> 0:02:02.240 I am very pleased to say that we are going 0:02:02.280 --> 0:02:04.520 to be talking about all of this with really I 0:02:04.560 --> 0:02:06.520 know we say this all the time, but really the 0:02:06.600 --> 0:02:10.400 perfect guest, someone who has basically made a career out 0:02:10.440 --> 0:02:14.480 of trading oil and other commodities at very volatile times 0:02:14.600 --> 0:02:17.600 and has been very good at it um in recent years. 0:02:17.840 --> 0:02:20.440 We're going to be speaking with Pierre and Gerund, the 0:02:20.480 --> 0:02:25.640 founder of Anderond Capital Management, big commodities hedge funds. So, Pierre, 0:02:25.760 --> 0:02:28.079 thank you so much for coming on my pleasure. High 0:02:28.120 --> 0:02:31.239 Joe High, Tracy, Hi, So I'm trying to think where 0:02:31.280 --> 0:02:34.079 to begin, but maybe maybe we just ask you, how 0:02:34.120 --> 0:02:36.600 have the past couple of weeks been for you? Well, 0:02:36.639 --> 0:02:38.760 I mean it's been a lot of work men. Clearly, 0:02:39.200 --> 0:02:43.120 it's a new it's a market that's driven by geopolitical events. Um, 0:02:43.520 --> 0:02:46.720 there's been a lot of reading trying to understand, you know, 0:02:46.760 --> 0:02:48.440 how the war will turn out and the kind of 0:02:48.560 --> 0:02:51.800 sanctions and that that that that will happen and they'll 0:02:52.160 --> 0:02:54.880 keep on being added every day. So it's been, you know, 0:02:55.120 --> 0:02:58.239 lots of work and very stressful and also obviously very 0:02:58.280 --> 0:03:00.960 sad to witness that we have such a war now 0:03:01.000 --> 0:03:04.080 in the twenty one century. Um, we don't expect that, 0:03:04.440 --> 0:03:07.920 you know, we don't tell you very unnecessary war and 0:03:07.919 --> 0:03:11.720 and really tragic. So, Um, a lot of emotions and 0:03:11.720 --> 0:03:13.640 and a lot of work and a lot of stress. Actually. 0:03:14.600 --> 0:03:18.320 So obviously we've seen this incredible well we've seen this 0:03:18.639 --> 0:03:21.760 huge surge in the price of oil that goes without 0:03:21.800 --> 0:03:28.240 saying this steep contango, which signifies the market is extremely tight. 0:03:28.760 --> 0:03:31.680 Are there any historical periods maybe let's start there, like 0:03:31.800 --> 0:03:35.080 how novel does this feel in terms of the market 0:03:35.680 --> 0:03:37.840 or is this does it feel like the sort of 0:03:37.880 --> 0:03:41.680 general conditions are something you've seen before, Like how much 0:03:41.760 --> 0:03:44.240 is everyone in new territory here? Yeah, I think it's 0:03:44.240 --> 0:03:47.200 a new territory. I can't speak of an event that 0:03:47.240 --> 0:03:50.240 will seemed over the last few decades really, um, So 0:03:50.280 --> 0:03:53.800 we started the year already with very low inventories, with 0:03:54.000 --> 0:03:56.280 the low spec capacity in the hands of Opeque and 0:03:56.320 --> 0:04:01.560 in general low production cacy production capacity, a low expected 0:04:01.960 --> 0:04:06.520 supply goes and high expected demand goes thanks to you know, 0:04:06.560 --> 0:04:09.240 the week of we from COVID. So we already started 0:04:09.280 --> 0:04:12.560 the year before the invasion with very very strong fundamentals 0:04:12.600 --> 0:04:15.800 and the level of inventories are very low. The level 0:04:15.840 --> 0:04:19.160 of backqualation so actually, you know, the stronger backqualation and 0:04:19.240 --> 0:04:22.680 needs backqualation means the content the first contracts are much 0:04:22.720 --> 0:04:24.880 higher than the back contracts and and it means that 0:04:24.880 --> 0:04:28.279 the market is very tight physically. So we were already 0:04:28.320 --> 0:04:32.800 at two dollars a months backqualation before Russia invaded Ukraine 0:04:33.279 --> 0:04:35.920 and night between four and five dollars depending on the 0:04:36.000 --> 0:04:39.880 day for for the first three months, and gas all 0:04:40.000 --> 0:04:43.400 went to crazy backualation. At some point it was above 0:04:43.440 --> 0:04:46.520 fifty dollars the bubble in one month, you know, between 0:04:46.560 --> 0:04:49.400 the March and April contracts. So we've never seen this 0:04:49.600 --> 0:04:53.000 type of backqualation and and and such a strong felical market. 0:04:53.120 --> 0:04:57.000 And it's only the start, you know, so far there's 0:04:57.040 --> 0:04:59.320 you know, they haven't been like massive dis options yet. 0:04:59.400 --> 0:05:02.120 It's just the the fears of how the sanctions will 0:05:02.200 --> 0:05:05.880 bite that that keeps the market tight. So it could 0:05:05.880 --> 0:05:08.320 be only the beginning, like it could be the end. 0:05:09.200 --> 0:05:11.400 We don't know, So it makes it difficult to to 0:05:11.400 --> 0:05:14.480 to make strong calls like Tracy, did I say contango 0:05:14.720 --> 0:05:18.080 or vagradation? Of my question? I always get I always 0:05:18.400 --> 0:05:20.440 I always slip and say the wrong one, even if 0:05:20.440 --> 0:05:23.279 they're all these years of trying to memorize it. But 0:05:23.360 --> 0:05:25.240 I do know that the front month oil is far 0:05:25.279 --> 0:05:27.960 more expensive than the oil further out. Yes, I only 0:05:28.000 --> 0:05:30.640 remember the term because of that oil buying a barrel 0:05:30.680 --> 0:05:33.000 of oil peace and then trying to buy a barrel 0:05:33.000 --> 0:05:34.720 of oil back when it was in contango and we 0:05:34.760 --> 0:05:36.560 could all store it under our beds and wait for 0:05:36.640 --> 0:05:39.040 prices to increase. But that is not the case. Anymore, 0:05:39.120 --> 0:05:42.479 we are firmly in backwardation. Um, let me ask a 0:05:42.640 --> 0:05:46.279 very basic question, which is I feel like your fund 0:05:46.640 --> 0:05:50.479 is often described as having bullish bets on commodities, but 0:05:50.600 --> 0:05:52.760 I actually don't have a very good grasp of what 0:05:52.839 --> 0:05:55.599 those look like. How do you know how do you 0:05:55.600 --> 0:05:59.200 actually invest without revealing all of your trades and the book, 0:05:59.720 --> 0:06:02.440 but how do you actually invest in commodities? And what 0:06:02.520 --> 0:06:06.280 did your positions you know, generally look like going into 0:06:06.360 --> 0:06:09.719 I guess the recent turmoil. Sure, so actually, you know, 0:06:09.800 --> 0:06:13.320 I'm quite agnostic to you know, over time if places 0:06:13.440 --> 0:06:15.559 go up or down. So I'm not a producer of oil. 0:06:15.960 --> 0:06:18.479 So for me, I just you know, study the fundamental 0:06:18.839 --> 0:06:22.359 of the market, studies the growth of demand relative to 0:06:22.360 --> 0:06:25.880 the growth of supply, and as the wizard, uh, you know, 0:06:25.920 --> 0:06:27.720 have an idea if inventories are going to go up 0:06:27.720 --> 0:06:30.599 on or done it, and what kind of price would 0:06:30.640 --> 0:06:33.400 actually balance the market that we don't run out of 0:06:33.440 --> 0:06:38.160 inventories or we don't run out of of storage to 0:06:38.160 --> 0:06:41.320 to to put that inventory in. So actually I have 0:06:41.560 --> 0:06:43.839 not always been bullish. You know. There are period of 0:06:43.839 --> 0:06:48.120 time where we had big based positions, such as second 0:06:48.120 --> 0:06:51.479 half of two thousand and eight, we were short. The 0:06:51.640 --> 0:06:53.520 end of two thousand and fourteen, we were shot the 0:06:53.520 --> 0:06:56.680 world of two thousand and fifteen. We were shot before COVID. 0:06:56.839 --> 0:07:00.040 I mean when COVID started, we were shot down to 0:07:00.200 --> 0:07:04.080 negative prices. Um. So I've not only been long, right, 0:07:04.160 --> 0:07:07.000 we happened where we're long people where we were shot. 0:07:07.080 --> 0:07:09.479 So for me, I'm trying to make money from the 0:07:09.640 --> 0:07:13.400 large move in your market. So it means that sometimes 0:07:13.440 --> 0:07:16.280 will bet that prices will go up for sometimes for 0:07:16.360 --> 0:07:19.280 a few months or a few years, and and sometimes 0:07:19.280 --> 0:07:22.440 will bet that they go down over generally a few months, um, 0:07:22.560 --> 0:07:26.440 but actually like a year even um. So to to 0:07:26.600 --> 0:07:28.760 bet on all prices going up, I mean what we 0:07:28.840 --> 0:07:31.680 do is we buy if we think that if we 0:07:31.760 --> 0:07:34.360 have a British view on the market, meaning that we 0:07:34.400 --> 0:07:37.040 expect prices to work, what we do is that we 0:07:37.160 --> 0:07:41.360 buy futures, and so for Apple brand futures or the 0:07:41.360 --> 0:07:45.160 ability and futures, or we can be heating oil or 0:07:45.200 --> 0:07:50.120 gas oil or gasoline futures, and we'll pick like a 0:07:50.160 --> 0:07:52.880 month for Apple if we want to belong the front 0:07:52.880 --> 0:07:55.840 month contracts for an Apple at the moment it's it's 0:07:55.960 --> 0:07:58.160 May brand, or if we want to be long a 0:07:58.160 --> 0:08:00.040 bit more default on the care for an applegies some 0:08:00.200 --> 0:08:03.480 the brands UM and we also trade with options, so 0:08:03.760 --> 0:08:07.280 generally like we don't sell options, we either flat options 0:08:07.360 --> 0:08:10.320 or long options um so, meaning that they can be 0:08:10.400 --> 0:08:12.480 longer call or longer puts. But I'm not going to 0:08:12.560 --> 0:08:15.600 be short to call or short to put UM And 0:08:15.600 --> 0:08:17.920 so when when we feel like the market is going 0:08:17.960 --> 0:08:21.120 to you know, make a big move in a short 0:08:21.160 --> 0:08:24.080 period of time, then we'll prefer to be UM to 0:08:24.240 --> 0:08:27.400 express that view with options relative to two futures, it's 0:08:27.400 --> 0:08:30.000 a way to have more leverage and have less risks. 0:08:30.760 --> 0:08:34.240 But you don't trade physical are presumably you would always 0:08:34.240 --> 0:08:38.080 try to avoid taking physical delivery of, you know, a 0:08:38.080 --> 0:08:41.760 tankerful of oil. Sure, we don't do physical. I've never 0:08:41.800 --> 0:08:46.040 done physical. Understand the rules and height works, but but 0:08:46.480 --> 0:08:49.120 it's mainly to understand how it can impact the pricing. 0:08:49.440 --> 0:08:53.560 But I myself never to delivere or delivery of dabble 0:08:53.640 --> 0:09:07.560 for it. M It feels like the market at the moment, 0:09:07.920 --> 0:09:11.040 you know, obviously the commodity space is very financialized. There 0:09:11.080 --> 0:09:13.040 are a lot of traders such as yourselves who deal 0:09:13.040 --> 0:09:15.280 in these things. But it feels like the physical is 0:09:15.320 --> 0:09:18.199 becoming much more important. And I've seen some people talk 0:09:18.240 --> 0:09:21.719 about the potential for a squeeze in the April contract, 0:09:21.960 --> 0:09:23.760 you know, sort of the reverse of what we saw 0:09:23.960 --> 0:09:27.520 in March or April of twenty when oil went negative. 0:09:27.600 --> 0:09:30.240 Maybe there won't actually be enough oil to deliver into 0:09:30.280 --> 0:09:33.120 these contracts this time around. So I'm just wondering how 0:09:33.160 --> 0:09:36.560 you're thinking about how the physical relates to the actual 0:09:36.600 --> 0:09:41.760 trading at the moment. Well, that's um, it's really important 0:09:41.800 --> 0:09:45.120 to understand the vehicle because it's what's going to drive 0:09:45.160 --> 0:09:48.000 the place of oil. So an ample, let's say during 0:09:48.000 --> 0:09:52.480 the COVID times when the demand suddenly collapsed of the night, 0:09:53.080 --> 0:09:55.800 we built a lot of inventories of a shop period 0:09:55.880 --> 0:09:59.839 of time, and you know, the infrastructure of the your market, 0:10:00.120 --> 0:10:04.880 you know, it was not built to withstand those kind 0:10:04.920 --> 0:10:08.120 of events of losing twenty percent of worlds demand overnight. 0:10:08.600 --> 0:10:14.960 So the left of empty storage was um enough, was 0:10:15.080 --> 0:10:18.120 actually could only take one and a half months of 0:10:18.280 --> 0:10:22.440 this uh willy low demand before all the thanks were full, 0:10:23.000 --> 0:10:25.880 and so in April two thousand and twenty, when all 0:10:25.880 --> 0:10:28.800 the thanks were full. Basically, it's just in some production 0:10:28.840 --> 0:10:31.040 that needs to be moved. Nobody can buy that oil, 0:10:31.080 --> 0:10:34.080 and that's where placed negative. And as you say, like 0:10:34.120 --> 0:10:38.080 when when when we're in the opposite scenario where inventories 0:10:38.080 --> 0:10:41.600 are very low and there are places in the world 0:10:41.600 --> 0:10:46.000 where a delivery of certain contracts such as Cushing in 0:10:46.000 --> 0:10:51.280 Oklahoma for doubl TI, where the tanks are all empty 0:10:51.400 --> 0:10:55.880 and there's no no all in those tanks anymore. If 0:10:55.880 --> 0:10:58.920 somebody is a long future, then try to take delivery 0:10:59.240 --> 0:11:02.480 of of oil at that at that place, at that 0:11:02.520 --> 0:11:05.280 point in time, well, nobody can deliver and then it 0:11:05.320 --> 0:11:08.920 can go to any price. So generally what happens is 0:11:09.080 --> 0:11:12.680 that that's where the kind of so called speculators are 0:11:12.720 --> 0:11:15.960 in in in the middle to to help make the 0:11:16.040 --> 0:11:18.480 price moving. After that, we're never in a situation where 0:11:19.240 --> 0:11:23.719 either the tanks are full or either the tanks are empty. 0:11:23.920 --> 0:11:26.240 So it means some high it means you know that 0:11:26.360 --> 0:11:29.600 prices have not gone up fast enough and for long 0:11:29.720 --> 0:11:33.959 enough to either bring more extra supply or actually we 0:11:34.120 --> 0:11:38.360 use demand before we run out of inventories. And that's 0:11:38.400 --> 0:11:40.280 where sometimes people want to know what is the role 0:11:40.320 --> 0:11:44.080 of speculators. I mean, it's actually a price discovery and 0:11:44.080 --> 0:11:47.679 and also giving the white signal to producers and consumers 0:11:48.040 --> 0:11:50.760 in order not to run out of storage capacity or 0:11:51.320 --> 0:11:55.280 um not to run out of inventories, because then prices 0:11:55.280 --> 0:11:57.840 can go anywhere. Right if somebody has to buy the 0:11:57.840 --> 0:12:00.480 oilatiny price, you know, you could go to you know, 0:12:00.559 --> 0:12:03.760 five dollars bubble back coalition, you can't go anywhere. So 0:12:03.800 --> 0:12:07.200 that's where generally what what the price should do. The 0:12:07.280 --> 0:12:11.840 price should move in order to keep the the inventories 0:12:11.920 --> 0:12:15.760 within kind of kind of you know hand that makes 0:12:15.760 --> 0:12:18.840 the market function. Let's talk a little bit more about 0:12:19.280 --> 0:12:23.520 the fundamentals themselves. And there's like a furious debate obviously 0:12:23.600 --> 0:12:27.280 in the US context, in particular why we haven't seen 0:12:27.520 --> 0:12:32.599 a more aggressive ramp up in UH in drilling and 0:12:32.720 --> 0:12:36.200 explorations such that I get greater supply. Why haven't we 0:12:36.240 --> 0:12:38.600 in your view, because we've had other theories, But what's 0:12:38.679 --> 0:12:41.480 your explanation for why we haven't seen a more aggressive 0:12:41.520 --> 0:12:45.280 supply response. I think there's two reasons, um. So the 0:12:45.320 --> 0:12:47.520 first one is that all the all the I mean 0:12:47.559 --> 0:12:49.600 a lot of the easy oil in the US has 0:12:49.679 --> 0:12:52.080 been drilled. You know, generally when you come with like 0:12:52.440 --> 0:12:56.160 a new field, a new basin, well, the producers will 0:12:56.240 --> 0:12:58.400 will go way, it will drill way, it's easier to 0:12:58.440 --> 0:13:00.320 get the oil, and over time they'll get where it's 0:13:00.320 --> 0:13:03.000 a bit more challenging. So I would say that now 0:13:03.640 --> 0:13:07.840 US shell has been producing you know, at scale for 0:13:07.920 --> 0:13:11.280 ten years, and they're still room you know for another 0:13:11.840 --> 0:13:15.920 ten years of also of strong supply. But I'm not 0:13:15.960 --> 0:13:19.800 sure there's a room for you know, many decades of 0:13:20.160 --> 0:13:23.640 high production and definitely high production goals. So some of 0:13:23.679 --> 0:13:25.360 it is due to the fact that it gets the 0:13:25.400 --> 0:13:28.680 fields are getting a bit more mature, and and another 0:13:28.840 --> 0:13:31.600 reason is also because you know a lot of the 0:13:31.640 --> 0:13:34.319 shallow producers in the US have lost a lot of money. 0:13:34.360 --> 0:13:37.560 They have been focused on on wasising production over the years, 0:13:38.080 --> 0:13:41.560 uh and taking some debt against it and actually not 0:13:41.600 --> 0:13:44.120 being profitable. You know, the most of them lost a 0:13:44.120 --> 0:13:46.640 lot of money. At some point, the whole industry had 0:13:46.679 --> 0:13:50.040 burned through six hundred billion dollars of cash and the 0:13:50.080 --> 0:13:53.800 shareholders had taken a big hit. So producers like production 0:13:53.880 --> 0:13:57.240 was growing up in the US, but the films were 0:13:57.240 --> 0:14:01.280 not profitable. Now now there's they start to be profitable. 0:14:01.320 --> 0:14:06.080 So now finally at current prices um they get poditive 0:14:06.080 --> 0:14:10.240 cash flow and good profits, and the shareholders of those 0:14:10.240 --> 0:14:15.840 companies pressure the the CEOs to not grow production too 0:14:15.880 --> 0:14:18.319 fast because if they're going to fast, then prices question 0:14:18.360 --> 0:14:21.640 again and then the cab with money. And also there 0:14:21.720 --> 0:14:24.200 is some pressure you know for climate change, basically not 0:14:24.320 --> 0:14:27.520 to grow supply too fast in order to find a 0:14:27.560 --> 0:14:32.400 solution and replacement to focil fuels in terms of of supplier. Actually, 0:14:32.960 --> 0:14:34.800 but the issue is, you know, there's been a lot 0:14:34.840 --> 0:14:39.120 of work on pressurizing those companies not to grow supply 0:14:39.240 --> 0:14:42.680 too fast or even to to to have production decline, 0:14:42.960 --> 0:14:45.960 but there hasn't been a lot of work in giving 0:14:46.480 --> 0:14:49.600 a solution for the consumers right to have another choice 0:14:49.600 --> 0:14:52.840 but to buy oil. So, okay, we have like more 0:14:52.880 --> 0:14:56.120 electric cars every year, and that we car and going. 0:14:56.560 --> 0:14:59.240 But then the electricity that is being used for those 0:14:59.280 --> 0:15:02.280 electric cars us to be produced, and that depends where 0:15:02.280 --> 0:15:04.480 in the world some of it. Some of that electricity 0:15:04.520 --> 0:15:08.000 is still produced by cool or natural gas, still by 0:15:08.000 --> 0:15:10.720 fossil fuel, and some of it is renewables such as 0:15:11.280 --> 0:15:14.680 solar and wind. But we we need the big Now 0:15:14.720 --> 0:15:17.800 we have the issue that we have some shortage of 0:15:17.960 --> 0:15:21.160 electricity and oil. So it's a bit tricky, you know, 0:15:21.200 --> 0:15:22.920 Like I mean, in the US you have a bit 0:15:23.000 --> 0:15:24.960 less of a polem. I think in Europe it's a 0:15:25.080 --> 0:15:27.760 much bigger problem where you know, if we were to 0:15:27.800 --> 0:15:31.800 replace normal cars, like you know, gasoline or diesel cars 0:15:32.040 --> 0:15:35.640 by by evs, because there's not enough power to charge 0:15:35.640 --> 0:15:37.880 those evs. So we we really have an issue at 0:15:37.960 --> 0:15:40.920 least in Europe in fending a solution for for our supply. 0:15:41.400 --> 0:15:44.520 How are you actually thinking about renewables at the moment, 0:15:44.560 --> 0:15:47.480 because I know, I think you were quite polish on 0:15:47.600 --> 0:15:51.840 emissions related credits, so basically making a bet on decarbonization. 0:15:52.200 --> 0:15:54.160 But on the other hand, you know, in the past 0:15:54.200 --> 0:15:56.960 couple of weeks, we've seen a lot of people, including 0:15:57.000 --> 0:15:59.880 some people who have been on this podcast, talking about 0:16:00.240 --> 0:16:02.560 the idea that renewables are not going to be able 0:16:02.920 --> 0:16:06.400 to ramp up enough to replace lost supply from the 0:16:06.480 --> 0:16:09.840 Russia situation, and that actually we might have to you know, 0:16:09.920 --> 0:16:13.160 stick with traditional oil and gas for longer than perhaps 0:16:13.160 --> 0:16:16.720 some people expected. Yeah, I mean, you know, this Russian 0:16:17.000 --> 0:16:21.320 situation was not expected, right, So the plan in terms 0:16:21.360 --> 0:16:25.040 of the Calbanization was to go supply of renewables you know, 0:16:25.120 --> 0:16:28.840 every year by quite a large amount that uh and 0:16:28.840 --> 0:16:31.880 and to have a gross in evase so you have 0:16:31.920 --> 0:16:35.560 more power supply coming from from renewables and then you 0:16:35.640 --> 0:16:38.760 have more evs and then you have the electricity to 0:16:38.840 --> 0:16:41.720 charge those evs and and it's all good. The issue 0:16:41.880 --> 0:16:45.000 so making the plant is for like a twenty year 0:16:45.040 --> 0:16:48.280 transitional so where you have more evis every year and 0:16:48.440 --> 0:16:53.080 more renewable um like power. That's something that can work 0:16:53.080 --> 0:16:55.840 on a long term basis, yes, but it cannot you know, 0:16:56.320 --> 0:16:59.000 change overnight. I mean, it takes time to build solar 0:16:59.080 --> 0:17:02.400 panels and with meals and to build enough evs and 0:17:02.520 --> 0:17:05.880 enough charging stations and all that. One issue that we've 0:17:05.880 --> 0:17:07.879 been aware of on our side for for quite a 0:17:07.880 --> 0:17:11.320 few years now is that the growth of supply in 0:17:11.359 --> 0:17:14.600 metals is not going to be large enough to build 0:17:14.640 --> 0:17:17.960 as many evs and to electrify the world as fast 0:17:18.000 --> 0:17:20.960 as we'd like because the miners have not invested enough. 0:17:21.000 --> 0:17:23.800 So you know, the miners also there have been under 0:17:23.840 --> 0:17:26.600 pressure not to mind because of you know, the E. 0:17:26.800 --> 0:17:29.240 S G pressure. But then it means, okay, we don't 0:17:29.240 --> 0:17:31.160 We're not going to get enough metals in the medium 0:17:31.200 --> 0:17:34.359 to long term to build the power supply with renewables 0:17:34.600 --> 0:17:36.359 because that takes a lot of metals. Takes a lot 0:17:36.400 --> 0:17:40.640 of metals to to build renewables and then a lot 0:17:40.680 --> 0:17:44.400 of metals to build batteries. Uh, and the evs take 0:17:44.440 --> 0:17:47.360 a lot more cooper um. And we won't have enough 0:17:47.359 --> 0:17:49.240 of that in the long term. So that's the long 0:17:49.320 --> 0:17:51.920 term theology. It's the challenge. I think metal spaces will 0:17:51.920 --> 0:17:54.600 have to go up a lot in order to incentivize 0:17:54.840 --> 0:17:59.159 enough like goals to be able to recombinize the world 0:18:00.119 --> 0:18:03.320 over time. Now, if we lose you know, five million 0:18:03.320 --> 0:18:08.040 balls a day from Russian all overnight, we can't have 0:18:08.160 --> 0:18:11.880 certainly a lot more power coming from renewables overnight and 0:18:11.920 --> 0:18:14.120 a lot more heavies overnight. It takes time to build 0:18:14.119 --> 0:18:19.400 all that. So it's already at capacity. Um. So there's 0:18:19.400 --> 0:18:21.800 the things that can really change in the very short term. 0:18:22.119 --> 0:18:24.960 So I said we place Russian oil ry. Now, let's 0:18:25.000 --> 0:18:29.239 say over the next two years. What we can do is, 0:18:29.760 --> 0:18:31.640 so let's say if we if we are losing four 0:18:31.640 --> 0:18:34.399 million balls today of Russian oil for the next two years, 0:18:34.600 --> 0:18:38.840 we can replace I guess the saudiast and create a 0:18:38.880 --> 0:18:41.920 new ways could but actually increase production by one and 0:18:41.960 --> 0:18:44.520 a half million today. They will not do it before 0:18:44.680 --> 0:18:47.520 they understand that the Russian oil is out and will 0:18:47.520 --> 0:18:49.560 not come back in time soon, so they will not 0:18:49.600 --> 0:18:52.920 do it preemptively. But I believe they will increase production 0:18:53.119 --> 0:18:55.800 once that that Rasian supply is out of the market 0:18:55.880 --> 0:19:00.440 and there's visibility on on how much and for how long. 0:19:00.760 --> 0:19:02.280 So I believe they can bring one and a half 0:19:02.280 --> 0:19:05.080 million bars today, which is not high by historical standard, 0:19:05.160 --> 0:19:08.160 but it is something. Is that your gut take that 0:19:08.280 --> 0:19:10.200 the Russian oil that's been taken out of the market 0:19:10.280 --> 0:19:12.800 is gone for good or at least for the foreseeable future. 0:19:13.240 --> 0:19:16.000 It will depend, you know, if we're going to have 0:19:16.040 --> 0:19:19.080 some kind of regime changing in Russia. So for me, 0:19:19.119 --> 0:19:22.440 it's not only about the sea fire. But I still 0:19:22.480 --> 0:19:26.840 think that the sanctions will stay on Russia until the 0:19:26.960 --> 0:19:28.840 West can feel like they can trust them and that 0:19:28.960 --> 0:19:32.000 they will not go attack another neighbor like a few 0:19:32.040 --> 0:19:36.200 months later, or attack NATO countries. Um. So I think 0:19:36.240 --> 0:19:38.920 that there's need to be once it's over, there will 0:19:38.960 --> 0:19:41.320 be there will need to be a trust that it 0:19:41.400 --> 0:19:45.080 will be um we gained. And for that trust to 0:19:45.080 --> 0:19:46.560 be we gained, I don't think it can be with 0:19:46.600 --> 0:19:49.119 the current regime. I mean, you can't go from being 0:19:49.119 --> 0:19:53.000 scared of them or using nuclear strikes and using chemical 0:19:53.040 --> 0:19:57.400 weapons and and biological weapons to certainly like negotiate and 0:19:57.680 --> 0:20:00.640 give the money again. Um So, I think that will 0:20:00.680 --> 0:20:03.720 need to be a regime change in some way with 0:20:03.880 --> 0:20:06.560 the regime that we feel we can trust as we 0:20:06.720 --> 0:20:10.320 as the West, before the sanctions are lifted, or at 0:20:10.400 --> 0:20:13.840 least a big part of the sanctions are lifted. Um So, 0:20:13.960 --> 0:20:17.159 in in that way, I think, yes, we could be 0:20:17.160 --> 0:20:20.000 in a situation where we will lose rational for some 0:20:20.119 --> 0:20:22.920 time until there's a regime change. But let's say if 0:20:22.920 --> 0:20:25.639 that's a origin change in one week. I mean I 0:20:25.640 --> 0:20:30.440 think it's unlikely, but you never know. Um then and 0:20:30.680 --> 0:20:33.040 if we if we can have good relationship with that regime, 0:20:33.080 --> 0:20:35.320 then then we could get the rational again in in 0:20:35.359 --> 0:20:38.159 a few months time. So it's very you know, it 0:20:38.240 --> 0:20:41.159 really depends on on on a lot of Uh, it's 0:20:41.200 --> 0:20:43.160 going to pan out. But I don't think that certainly, 0:20:43.200 --> 0:20:45.920 if they started fighting, they start fighting, the oil comes back, 0:20:45.920 --> 0:20:47.480 It's not going to be the case. The oil is 0:20:47.480 --> 0:20:49.480 going to be gone for good. And even though the 0:20:49.560 --> 0:20:52.400 only the US put sanctions on on a rational US 0:20:52.440 --> 0:20:55.879 and UK for now you can still buy it, and 0:20:55.880 --> 0:20:58.520 and the rest of the world. Um, there's a lot 0:20:58.520 --> 0:21:01.199 of self sanctioning going on, so a lot of the 0:21:01.240 --> 0:21:04.320 re finals, you know, they don't want to be uh, 0:21:04.400 --> 0:21:06.960 to be facing a PR disaster if they buy Rational oils. 0:21:06.960 --> 0:21:10.840 They don't want to contribute to you know, financing uh, 0:21:11.920 --> 0:21:15.520 like a war on on Ukraine and and potentially European 0:21:15.600 --> 0:21:17.479 and the rest of the world. So there's a lot 0:21:17.560 --> 0:21:19.720 at stake here, right, It's a it's a lot. It's 0:21:19.760 --> 0:21:23.800 about trying to avoid World War three, and we have 0:21:23.840 --> 0:21:26.640 to understand that that's going to because to pay. So 0:21:26.680 --> 0:21:28.840 I think, you know, like there's some issues as well 0:21:28.920 --> 0:21:32.920 with insurance or being able to ensure the ships that 0:21:32.960 --> 0:21:36.840 go take delivery of the Rasian oil. There's a PR disasters. 0:21:36.880 --> 0:21:41.240 There's also a financing issue where new banks want to 0:21:41.440 --> 0:21:43.800 give a letter of credit, even Chinese banks don't want 0:21:43.840 --> 0:21:46.359 to give a letter of credit to to for for 0:21:46.560 --> 0:21:51.119 aversion oil cargo. So even though we don't have formal 0:21:51.640 --> 0:21:57.200 sanctions yet from the EU, in practice U not everybody 0:21:57.240 --> 0:21:59.320 can buy oil. And there's a lot of logistical issues 0:21:59.359 --> 0:22:01.720 as well, and that will probably last for some time. 0:22:01.760 --> 0:22:04.160 So I think in the next few weeks, if that's 0:22:04.160 --> 0:22:08.720 still the case, Russia will have to stop production because 0:22:08.720 --> 0:22:11.960 they will run out of storage capacity at their points 0:22:12.920 --> 0:22:15.920 and and and so they will need to cut production 0:22:16.000 --> 0:22:18.960 by two at least two million partiday partentially fwi million parthday. 0:22:19.200 --> 0:22:21.160 And then it takes time to bring that supply back, 0:22:21.200 --> 0:22:24.600 you know, like if if the tanks are full at 0:22:24.600 --> 0:22:28.000 the at the parts, they can't carry on producing and 0:22:28.000 --> 0:22:29.439 and that's it, and then we lose it for some 0:22:29.520 --> 0:22:33.840 time until there's like a piece like a piece and 0:22:33.840 --> 0:22:36.800 a better relationship with Russia. So I think we could 0:22:36.880 --> 0:22:41.119 lose defensive original for for some time Russian gas making. 0:22:41.160 --> 0:22:44.280 Europe is very dependent on Russian gas. Gas has been 0:22:44.359 --> 0:22:48.679 natural gas Mali, Germany and Italy uh and they're working 0:22:48.720 --> 0:22:50.800 on some kind of work plants on how they could 0:22:50.800 --> 0:22:54.040 survive in case Rossia cloud is the tope or or 0:22:54.119 --> 0:22:57.000 could they actually you know, we use their demand so 0:22:57.040 --> 0:23:00.360 that they don't pay Russia as much money um. And 0:23:00.440 --> 0:23:04.320 so there will be some kind of rationing potentially in 0:23:04.320 --> 0:23:09.760 in in Europe, like to bring a natural gas demand down, 0:23:09.960 --> 0:23:12.919 and they will look at what they can do to 0:23:13.520 --> 0:23:17.600 accelerate the energy transition. So but that will require metals 0:23:17.640 --> 0:23:19.960 as well, and Russia is a big exporter of metals. 0:23:20.200 --> 0:23:21.800 So it's not it's not going to be busy, but 0:23:21.880 --> 0:23:23.720 it's it is what it is, right like, we have 0:23:23.800 --> 0:23:26.320 to find a solution. But to finish my point about 0:23:26.359 --> 0:23:29.680 how the version would be replaced, Um, if we lose 0:23:29.720 --> 0:23:32.160 four million barllars a day for some time, let's say 0:23:32.160 --> 0:23:33.920 we get one and a half million bills a day 0:23:33.960 --> 0:23:37.600 from from Gulf countries. Um, then it's to one half 0:23:38.160 --> 0:23:40.600 two point five million bars a day that we we 0:23:41.080 --> 0:23:43.920 have to we have to find some of it could 0:23:43.960 --> 0:23:47.399 be supplied by the global SPR, so the strategic reserves 0:23:47.480 --> 0:23:49.760 that the I manage, So some of it is in 0:23:49.800 --> 0:23:52.560 the US, but you have also a lot of city 0:23:52.560 --> 0:23:56.440 countries with SPR, and they could release up to five 0:23:56.480 --> 0:23:59.240 million ballars a day for twelve months. So let's say 0:23:59.240 --> 0:24:01.840 they could easy they could easily go to two million 0:24:01.840 --> 0:24:05.439 bars a day for you know, two and a half years. 0:24:05.840 --> 0:24:07.360 But then that means that in two an a half 0:24:07.400 --> 0:24:08.840 years there will be you know, you know, all the 0:24:09.000 --> 0:24:11.000 ESPR will be empty and they will have to be 0:24:11.440 --> 0:24:14.439 to re supply the ESPR. And I think we have 0:24:14.520 --> 0:24:16.840 to accept some demand destruction, you know, like we really 0:24:16.840 --> 0:24:19.760 have to save energy as much as we can UM. 0:24:20.119 --> 0:24:23.680 And and if we can find some kind of government 0:24:23.760 --> 0:24:26.520 mandate and it's not easy to bring the demand down, 0:24:26.880 --> 0:24:30.239 UM mandate could be something like a confinement, right like 0:24:30.280 --> 0:24:32.640 we saw it two years ago with COVID we had 0:24:32.720 --> 0:24:37.160 some kind of global lockdown, global confinement that bote all 0:24:37.200 --> 0:24:41.200 demands down by here if we just need to think 0:24:41.240 --> 0:24:43.679 of bringing all demands down by two percent, it's not 0:24:43.720 --> 0:24:45.960 going to be as drastic as the global lockdown, but 0:24:46.600 --> 0:24:49.920 there there could be some either some government mon dates 0:24:50.040 --> 0:24:52.680 to bring demand down or it will have to be 0:24:53.040 --> 0:24:55.439 coming from price, and then the price will have to 0:24:55.440 --> 0:24:58.680 be high enough to bring that demand down by one 0:24:58.720 --> 0:25:00.639 and a half million barllars a day or so. What 0:25:00.840 --> 0:25:04.000 is right now as we're talking brent oils at a 0:25:04.119 --> 0:25:07.920 hundred and fourteen w as less, What does that mean 0:25:08.560 --> 0:25:13.240 is that are these demand destruction levels? Is they're driving 0:25:13.320 --> 0:25:15.920 or flying or something else that is not happening at 0:25:15.920 --> 0:25:17.840 these levels or does it need to go higher in 0:25:17.960 --> 0:25:21.520 order to really move the needle on the demand side. Yeah, 0:25:21.520 --> 0:25:25.320 So basically, when when people speak about demand destruction, UM, 0:25:25.359 --> 0:25:29.720 you know, you can think of it in many, many 0:25:29.800 --> 0:25:34.240 different ways. Um, you don't really generally have such things 0:25:34.280 --> 0:25:36.960 as demand destruction for oil, because you can't really replace 0:25:37.640 --> 0:25:40.760 in the shop term, you know, driving you know, your 0:25:40.800 --> 0:25:43.919 car by something. So sure some people will decide to 0:25:43.920 --> 0:25:47.159 walk or take a bike, but that's very marginal, um 0:25:47.359 --> 0:25:50.560 Journally the car is used to doing like longer distance 0:25:50.760 --> 0:25:54.840 and and I guess some of it there could be 0:25:54.880 --> 0:25:57.560 at the margin a bit more public transport and these 0:25:57.640 --> 0:26:01.120 kind of things, but it stays quite quite mad general. Generally, 0:26:01.119 --> 0:26:06.199 what brings the demand destruction is some kind of economic crisis. 0:26:06.520 --> 0:26:09.159 I mean, you also have you know, demand destruction. You 0:26:09.320 --> 0:26:13.080 sent that if people seeing the prices are high, maybe 0:26:13.160 --> 0:26:14.960 they'll use their cars a bit less for one or 0:26:14.960 --> 0:26:17.400 two months, and then they'll get used to the new 0:26:17.440 --> 0:26:20.040 price and carry on using their cars as they were before. 0:26:20.480 --> 0:26:22.720 So that's not really demand destruction is just like a 0:26:22.760 --> 0:26:24.880 slowdown in demand for one or two months, and then 0:26:24.880 --> 0:26:28.399 the demand comes back, Um, and then it's a question 0:26:28.440 --> 0:26:31.480 of you know, at what price do do we have? 0:26:31.560 --> 0:26:34.600 Like a large recession that then brings you know, lower 0:26:34.600 --> 0:26:38.920 economic goals and as a result, lower all demand. And 0:26:38.960 --> 0:26:42.040 that's generally what really brings prices down is when we 0:26:42.240 --> 0:26:45.040 eventually and and what brings demand down, that's when we 0:26:45.119 --> 0:26:50.440 have a large recessions, so not small recessions, but large recessions. 0:26:50.560 --> 0:26:54.480 And that price will always depend on what economic environment 0:26:54.520 --> 0:26:56.880 we will be. So example, for two in two seven 0:26:56.960 --> 0:26:59.760 and eight, we went up to dred and forty seven 0:26:59.760 --> 0:27:03.399 dollars the battle, which is equivalent to around two hundred 0:27:03.400 --> 0:27:06.960 dollars a bottle of two days dollars, and the you 0:27:07.000 --> 0:27:09.600 know at the time, but we didn't see that demand 0:27:09.720 --> 0:27:14.040 was being hit. But when Leman went burst and there 0:27:14.160 --> 0:27:18.600 was no UM, then when the financial crisis started, then 0:27:18.720 --> 0:27:21.439 there was a collapse of the trade of financing and 0:27:21.480 --> 0:27:25.440 then all demand collapsed as a result. UM in two 0:27:25.480 --> 0:27:30.560 thousand eleven to thirteen, even like first half, like two 0:27:30.600 --> 0:27:34.360 thousand fourteen, we had brand was averaging hundred and ten 0:27:34.400 --> 0:27:38.359 dollars a battle, which is equivalent to one and fifty 0:27:38.400 --> 0:27:43.240 dollars barttle two days dollars, and we had European sovereign 0:27:43.280 --> 0:27:46.720 crisis at the time. UM and the economy could you 0:27:46.720 --> 0:27:50.160 know handle hundred fifty dollars of two days dollars for 0:27:50.160 --> 0:27:52.359 for three and a half years, you know, And I 0:27:52.400 --> 0:27:55.760 believe they called me today before before the Russian invasion, 0:27:55.800 --> 0:27:58.520 at least, because we don't understand what will be you know, 0:27:58.560 --> 0:28:02.159 all the impact going forward, UM could definitely handle more 0:28:02.200 --> 0:28:07.920 than so For me, UM, I was expecting already prices 0:28:07.960 --> 0:28:13.479 to above went fifty before the Version invasion. UM, so 0:28:13.520 --> 0:28:15.439 I was already Britia. I don't think that all the 0:28:15.480 --> 0:28:18.239 move up in oil is due to Russia, you know, 0:28:18.440 --> 0:28:22.520 it's uh, it's the the acceleration of the move up 0:28:22.560 --> 0:28:24.919 of the last two weeks is due to it. But 0:28:25.440 --> 0:28:28.879 we would have gone to those places anywhere and higher 0:28:29.000 --> 0:28:31.040 this time. It would have been a bit more steady, 0:28:31.359 --> 0:28:33.159 but it would have been it would have gone higher. 0:28:33.240 --> 0:28:34.840 So it means to me the fact that we only 0:28:34.880 --> 0:28:37.600 at d and fourteen dollar brand now, it tells me 0:28:37.680 --> 0:28:41.160 that the market doesn't believe that UM, we will lose 0:28:41.360 --> 0:28:44.200 this oil for very long. I mean, how high do 0:28:44.240 --> 0:28:46.960 you think it could go and what level would be 0:28:47.000 --> 0:28:50.120 worrying to you in terms of demand destruction? Well, I 0:28:50.120 --> 0:28:54.200 think UM like close to two battle, so much higher 0:28:54.240 --> 0:28:58.080 than today. I feel like there's no demand destruction all brands, 0:28:58.320 --> 0:29:01.480 and we'll have to go significantly high before dement can 0:29:01.560 --> 0:29:04.800 go down by enough. But that's also assuming there's no 0:29:04.960 --> 0:29:09.240 government mondate in some kind of confinements. Well, let's say 0:29:09.400 --> 0:29:12.080 two days amounts, we are not doing anything and we 0:29:12.080 --> 0:29:13.840 are in confinement for two days amounts. I mean that 0:29:13.880 --> 0:29:16.760 could be some some solutions like that to bring demand down. 0:29:17.040 --> 0:29:20.360 But if there's no no government mondates, then I think 0:29:20.480 --> 0:29:26.280 that oil will be enough to to bring demand down 0:29:26.440 --> 0:29:29.040 to balance the market. Could we see two hundred dollar 0:29:29.120 --> 0:29:32.280 oil this year? Yes? I think so? Yes? Can I 0:29:32.360 --> 0:29:34.600 just ask I want to stand back. You mentioned, you know, 0:29:34.640 --> 0:29:37.680 the potential supply response from Saudi equate from the other 0:29:37.720 --> 0:29:40.800 Golf states. I find it striking, And we did an 0:29:40.800 --> 0:29:43.840 oil episode a few weeks ago that OPAC is no 0:29:43.920 --> 0:29:46.040 longer the first thing we talked about when we talked 0:29:46.040 --> 0:29:49.280 about oil. We always talk about shale, the shale response first, 0:29:49.400 --> 0:29:51.600 whereas several years ago, if you talk oil, the first 0:29:51.640 --> 0:29:54.680 thing everyone would talk about is well, what's OPEC gonna do? 0:29:54.800 --> 0:29:57.200 And now it feels like they're almost playing a second fiddle. 0:29:57.760 --> 0:30:01.400 What is the politics at OPEC right now? And how 0:30:01.440 --> 0:30:04.440 are the open leaders thinking about it? What is your 0:30:04.880 --> 0:30:10.320 forecast generally for how how that group is going to behave? Okay, 0:30:10.360 --> 0:30:13.160 so first I was, you know, really impressed by the 0:30:13.320 --> 0:30:20.400 reaction in March April when the collectively you know, agreed 0:30:20.480 --> 0:30:23.760 to cut collection by one ten million dollars a day. Uh, 0:30:23.920 --> 0:30:26.960 prices were very low, um, so they were struggling, but 0:30:27.040 --> 0:30:30.880 they got together and agreed to cut ten million bars today. 0:30:31.160 --> 0:30:33.600 Otherwise we would have had negative prices for some time. 0:30:33.760 --> 0:30:36.560 You know, that would have led to a much larger 0:30:36.600 --> 0:30:41.240 collapse in the supply today. And then they stayed quite compliant, 0:30:41.400 --> 0:30:44.400 you know, over the over time, so even when prices 0:30:44.440 --> 0:30:48.480 were we're covering in second half twenty twenty and then one, 0:30:49.280 --> 0:30:52.320 they were really careful about bringing oil back to the market. 0:30:52.320 --> 0:30:55.719 So they did it gradually, really together, doing really respecting 0:30:56.440 --> 0:31:00.280 the quarta that they put. Very few countries to did, 0:31:00.360 --> 0:31:03.840 if any. And what we noticed is quite a few 0:31:03.880 --> 0:31:07.640 countries in Opaque plus could not meet their quota. Many 0:31:07.640 --> 0:31:11.040 of the African countries they could not produce as much 0:31:11.120 --> 0:31:14.160 as what they were allowed to because of under investment. 0:31:14.600 --> 0:31:17.360 So over the years there's been like under investments that 0:31:18.000 --> 0:31:22.200 brought to bote the fields to decline. There was no 0:31:22.320 --> 0:31:25.520 new fields coming and the production was going down. So 0:31:25.640 --> 0:31:27.760 that's why now there's only like a little bit of 0:31:28.080 --> 0:31:30.840 production capacity I think I won one and a half 0:31:30.840 --> 0:31:33.000 million dollars a day. You know, when I when I 0:31:33.040 --> 0:31:36.760 say spec capacity is production that can be brought on 0:31:37.000 --> 0:31:39.800 and kept for one or two years. I think it's 0:31:39.840 --> 0:31:44.280 probably only Saudi create a new a and that's pretty 0:31:44.360 --> 0:31:46.600 much it. I think most of the other countries are 0:31:46.640 --> 0:31:50.480 at at maximum so in a way because they could not. 0:31:50.760 --> 0:31:53.280 You know, their quota has been going up every months 0:31:53.320 --> 0:31:55.200 for the last few months, but the production has not 0:31:55.440 --> 0:31:59.480 because they don't manage to UM. So that's why I 0:31:59.480 --> 0:32:02.120 think it's you know, we know that they can bring 0:32:02.120 --> 0:32:04.720 one and a half niversity. We'll probably get to deal 0:32:04.800 --> 0:32:07.200 with Iran bringing a million balls to day back, but 0:32:07.280 --> 0:32:11.000 that's expected by the market and UM and then you 0:32:11.000 --> 0:32:14.840 you need more more supply from from the US, but 0:32:14.880 --> 0:32:19.080 that will take you know, twelve months also for for 0:32:19.160 --> 0:32:22.360 the US to be able to bring higher levels of 0:32:22.440 --> 0:32:35.560 supply than what is expected today for next year. One 0:32:35.600 --> 0:32:38.640 of the big picture ideas that's been going around at 0:32:38.640 --> 0:32:42.120 the moment is this idea that as sanctions are imposed 0:32:42.120 --> 0:32:45.520 on Russia and it becomes clear that you know, the 0:32:45.680 --> 0:32:49.040 dollar and the dollar payment system can be weaponized to 0:32:49.160 --> 0:32:54.120 some extent against Western enemies, that maybe the dollar loses 0:32:54.160 --> 0:32:58.160 its position as reserve currency. Maybe Russia has to depend 0:32:58.400 --> 0:33:01.400 more on gold. And I guess we're sort of seeing 0:33:01.400 --> 0:33:05.640 a return of talk about commodity money or money that 0:33:05.760 --> 0:33:09.960 is backed by an actual thing. Is that something that 0:33:10.000 --> 0:33:12.760 you see happening? And I guess more broadly, you know, 0:33:12.920 --> 0:33:15.120 gazing into the future, do you see a world that 0:33:15.280 --> 0:33:19.320 is more tied to commodities or less tied to them, 0:33:19.400 --> 0:33:23.160 given the kind of volatility that we've seen recently. Sure? 0:33:23.480 --> 0:33:26.840 So first about the currency and the potential you know, 0:33:27.120 --> 0:33:30.040 loss of with a council for the dollar, I think 0:33:30.080 --> 0:33:35.920 it's overstated. I think uh, I think ability if a 0:33:36.000 --> 0:33:40.480 country had a currency back to gold or something, well, 0:33:42.240 --> 0:33:45.200 the Western world could still sanction that currency even if 0:33:45.200 --> 0:33:48.320 it's backed by gold. So you know, even now like 0:33:48.560 --> 0:33:51.680 Russia having having gold in reserves, where do they keep it? 0:33:51.720 --> 0:33:56.000 You know, maybe some of it could be frozen as well, 0:33:56.080 --> 0:33:59.280 even though it's gold, So it doesn't necessarily save you. 0:33:59.360 --> 0:34:04.400 Even same for cryptos, right like cryptos, Uh, some people 0:34:04.520 --> 0:34:06.920 think it's the stort of valuable When things get really 0:34:06.960 --> 0:34:09.000 bad and if you have no power, what happens to 0:34:09.000 --> 0:34:11.120 your krypto? What you can't really use it either. So 0:34:11.160 --> 0:34:13.200 there's always some situations that are difficult, but I would 0:34:13.239 --> 0:34:19.080 say currencies in general, it's always gonna be countries that 0:34:19.160 --> 0:34:23.200 have a strong rule of law and and trust and 0:34:23.239 --> 0:34:25.359 a strong financial market that will be able to have 0:34:25.400 --> 0:34:27.759 a strong currency. So for now, we have that in 0:34:27.800 --> 0:34:31.560 the US, in Europe, in Japan, and then when you 0:34:31.560 --> 0:34:33.880 look at China there's still a lot of capital control 0:34:33.960 --> 0:34:37.760 so and and it's not a consumer economy. They export 0:34:37.800 --> 0:34:41.719 a lot and so they hold a lot of U. S. Treasuries, 0:34:42.000 --> 0:34:45.160 so they are dependent on on on on on the US. Right, 0:34:45.200 --> 0:34:48.880 so I think to really have a strong currency, and 0:34:48.960 --> 0:34:52.200 that's what those countries don't understand, the more autocratic countries, 0:34:52.520 --> 0:34:56.320 is that if they don't have enough freedom and m 0:34:58.000 --> 0:35:01.799 low low enough level of corruption and uh you know, 0:35:01.960 --> 0:35:05.400 enough entrepreneurship and a strong rule of flaw, then they 0:35:05.440 --> 0:35:07.680 will never be able to have a strong currency. So 0:35:07.719 --> 0:35:10.640 then then we go into commodities. Okay, if people are 0:35:10.680 --> 0:35:13.719 worried about the value of currency because there's because of 0:35:13.760 --> 0:35:18.000 potential you know, high inflation, then I mean to protect 0:35:18.200 --> 0:35:23.680 oneself against high inflation, you have to belong things that 0:35:23.760 --> 0:35:27.319 the world needs. And you know, some people think that 0:35:27.320 --> 0:35:29.640 we need cryptocurrencies, but no, it's not something we need. 0:35:29.800 --> 0:35:32.239 It's maybe nice to have for some people, but it's 0:35:32.239 --> 0:35:34.799 not something we absolutely need. What we need is to 0:35:34.840 --> 0:35:41.279 be able to eat and move. So it's energy. Uh, 0:35:41.320 --> 0:35:45.600 it's energy, it's agricultural products, it's food, it's metal. So 0:35:46.000 --> 0:35:49.760 these are like the old school commodities that first people 0:35:49.800 --> 0:35:52.839 should be you know, should I should have enough exposure 0:35:52.920 --> 0:35:57.360 to in order not to be hit by inflation to negatively. 0:35:57.840 --> 0:36:00.239 And that's you know, despite the large move over the 0:36:00.320 --> 0:36:02.560 last couple of years, I mean coming from a very 0:36:02.600 --> 0:36:05.440 low base and now we're starting to be at relatively 0:36:05.520 --> 0:36:08.480 high historical numbers, we haven't seen a lot of investment 0:36:08.520 --> 0:36:11.200 going into commodities, right, Like most of the pension funds 0:36:11.280 --> 0:36:14.759 don't have the box thing. We have to be long communities, 0:36:15.120 --> 0:36:19.120 you know, like there's only long equities and bonds and 0:36:19.360 --> 0:36:22.040 they're looking at cup tools, but they have their litle commodities. 0:36:22.560 --> 0:36:25.839 So I think there will be more interesting commodities and 0:36:25.880 --> 0:36:29.879 there should be more investment um to to eventually bring 0:36:29.920 --> 0:36:34.400 more supply and to to be able to we stand 0:36:34.440 --> 0:36:38.160 against shocks requescying today. You know, this is a theme 0:36:38.239 --> 0:36:43.319 that comes up over and over again on on our episodes. 0:36:43.360 --> 0:36:46.400 Which is under investment? And you mentioned that some of 0:36:46.440 --> 0:36:50.120 the OPEC plus countries, particularly in Africa, we're not even 0:36:50.200 --> 0:36:53.280 able to sell as much oil as they were allotted 0:36:53.600 --> 0:36:56.480 because they didn't have the capacity. Can you talk a 0:36:56.560 --> 0:37:00.800 little bit about sort of across commodities, this is how 0:37:01.000 --> 0:37:03.640 sort of under investment are weally? And then how long 0:37:03.760 --> 0:37:06.399 is this cycle? Like are we going to see an 0:37:06.400 --> 0:37:09.520 increased investment cycle for five a decade to come? Like 0:37:09.560 --> 0:37:13.200 what is the sort of flip side of this decade 0:37:13.200 --> 0:37:16.600 of under investment gonna look at as every every country 0:37:16.719 --> 0:37:19.319 wants to sort of beef up it beef up its 0:37:19.360 --> 0:37:24.160 domestic capacity. So for agricultural products it's pretty fast, like 0:37:24.200 --> 0:37:28.040 within a year you can change things. But for metals 0:37:28.160 --> 0:37:30.920 it takes anywhere between seven and fifteen years. So you 0:37:31.000 --> 0:37:34.919 have to to build new minds. Um well, I think, 0:37:35.680 --> 0:37:39.200 and then you have to exploit those minds. But I mean, 0:37:39.480 --> 0:37:42.080 I think that there will be a different lengths of 0:37:42.120 --> 0:37:44.560 the cycle of when there's a shortage and when there's 0:37:44.600 --> 0:37:46.839 no shortage. So you know, in the past it could 0:37:46.880 --> 0:37:50.000 take quite a few years before getting the approval to 0:37:50.000 --> 0:37:53.560 build a mine, and that will probably be much faster 0:37:53.640 --> 0:37:57.680 now going forward when we'll get much higher prices, But 0:37:57.880 --> 0:37:59.719 only you know, it's going to be at least five 0:37:59.760 --> 0:38:04.719 years before the decision when the company decides to bring 0:38:04.760 --> 0:38:08.879 the production of subtle metals or minerals up and when 0:38:09.080 --> 0:38:12.359 that supply will come. So there's no like short term 0:38:12.400 --> 0:38:14.920 institution in terms of getting more metals for next year 0:38:15.040 --> 0:38:17.560 or in two years. It tends to be more like 0:38:18.120 --> 0:38:22.800 five years plus down the road. For oil outside of USHL, 0:38:22.920 --> 0:38:28.720 it's similar um it's for any any new projects journally 0:38:28.800 --> 0:38:33.640 today would bring oil supply in seven years time. So 0:38:33.680 --> 0:38:37.520 there's a lot of hesitation about going to invest in 0:38:37.640 --> 0:38:40.200 those long lead time projects today because you get all 0:38:40.320 --> 0:38:44.600 comes out in nine twenty thirty. People don't know what 0:38:44.760 --> 0:38:48.359 the demand levels will be by then. So I think 0:38:48.440 --> 0:38:50.960 that's that's kind of twacky in the long term to 0:38:51.040 --> 0:38:55.799 bring two I mean yeah, in the short term, to 0:38:55.800 --> 0:38:58.320 bring more more, more production. Only the US has a 0:38:58.360 --> 0:39:01.960 shorter circle of probably twelve before the decision to increase 0:39:02.000 --> 0:39:05.239 capex and getting more oil because they know where the 0:39:05.280 --> 0:39:08.239 oils have, all the infrastructures, they know, you know, they 0:39:08.280 --> 0:39:12.640 about the uh enough kind of capacity from the service 0:39:12.680 --> 0:39:16.560 companies to to actually bring bring that toil. So I 0:39:16.560 --> 0:39:19.000 would expect more coming from the US in the next 0:39:19.040 --> 0:39:20.640 few years and then from the rest of the world 0:39:20.640 --> 0:39:23.520 a bit later. Um, but I think we'll have to 0:39:23.600 --> 0:39:28.640 live with how your prices to keep you know, demand down, 0:39:29.200 --> 0:39:32.239 to keep to to be treated a bit more as 0:39:32.239 --> 0:39:35.560 a luxury product, and also to accelerate the energy transition. 0:39:36.239 --> 0:39:39.200 Just real quickly is the shortage of metals, I mean 0:39:39.200 --> 0:39:41.880 we hear about the same shortage we hear about obviously 0:39:41.920 --> 0:39:45.520 steel prices do then also trip up the ability to 0:39:45.600 --> 0:39:48.560 increase oil production. The fact that if you have tight 0:39:48.640 --> 0:39:53.040 commodity markets elsewhere, it makes new investment more difficult. Yeah, 0:39:53.080 --> 0:39:55.759 it does. Actually you you have I mean, as we 0:39:55.800 --> 0:39:58.920 saw last year, there's a lot of bottlenecks and you 0:39:58.920 --> 0:40:02.640 know everywhere, um due to COVID. And then once we 0:40:02.760 --> 0:40:06.040 get less supply of in the other communities and also 0:40:07.200 --> 0:40:11.160 very low unemployment number, you know, how to find the 0:40:11.160 --> 0:40:14.759 people and then to get all the technology you know, 0:40:16.120 --> 0:40:18.319 enough volume and at the white time to to to 0:40:18.360 --> 0:40:20.480 bring supply up. So it's going to be challeging any thing. 0:40:21.000 --> 0:40:26.520 Over the next ten years. Communities are gonna cap the 0:40:26.560 --> 0:40:29.640 community supply actually not only price, but level of supply 0:40:30.080 --> 0:40:33.120 will actually capt the type of economic goals we will 0:40:33.120 --> 0:40:36.040 be able to have. So I think a lot of 0:40:36.040 --> 0:40:38.760 people just assume we'll, you know, in their economic model, 0:40:38.840 --> 0:40:41.439 that we can have as most community as we want. 0:40:41.520 --> 0:40:43.640 Is just a question of demand, But no, I mean 0:40:43.680 --> 0:40:47.319 this time it will be supply constraints. I just want 0:40:47.360 --> 0:40:49.799 to go back to the idea of two d dollar 0:40:49.880 --> 0:40:52.439 per barrel oil because I'm sure some people who hear 0:40:52.680 --> 0:40:56.040 that number, um and think back to the previous record, 0:40:56.120 --> 0:40:59.000 which I think was almost a hundred and fifty dollars 0:40:59.080 --> 0:41:03.239 per barrel, They're going to be shocked and worried and 0:41:03.320 --> 0:41:06.840 wondering how exactly, you know, we get to a point 0:41:06.880 --> 0:41:09.000 in the market where oil can go up over a 0:41:09.080 --> 0:41:12.080 hundred dollars in less than a year potentially, can you 0:41:12.120 --> 0:41:16.080 maybe walk us through exactly what needs to happen in 0:41:16.200 --> 0:41:18.920 order to get to a number like that, Like, what 0:41:19.040 --> 0:41:21.960 exactly is the process that is going to take place 0:41:22.000 --> 0:41:24.720 in order to get to two hundred dollars per barrel? Okay, 0:41:24.719 --> 0:41:26.960 So I think it's um, you know, there's a lot 0:41:27.000 --> 0:41:31.280 of recently bias to people's mind. Johnny, we get choosed 0:41:31.280 --> 0:41:34.600 to with some prices. And at first we think andred 0:41:34.719 --> 0:41:37.520 is expensive, we complain, I mean once we let people 0:41:37.560 --> 0:41:40.720 in general complain, uh, and then they get used too hundred, 0:41:40.760 --> 0:41:43.160 and then they complain when it's one twenty, and then 0:41:43.200 --> 0:41:45.719 the complay went one forty. And but they get choosed 0:41:45.719 --> 0:41:48.319 to higher levels of the time. So the antiquation of 0:41:48.800 --> 0:41:51.359 it is still worth using this oil, you know. But 0:41:51.400 --> 0:41:53.759 and if you look at seems to certain an eight 0:41:54.160 --> 0:41:58.240 um so d and fifty dollars, then is two dollars 0:41:58.239 --> 0:42:01.680 today in two days dollars? If you as an inflation measure, 0:42:01.719 --> 0:42:05.520 you take the GDP global GDP flatter, then it's two twenty. 0:42:05.840 --> 0:42:07.880 So the way I think of it is, is it 0:42:08.000 --> 0:42:10.680 more bullish today's and then yes, it's more bullish today 0:42:10.719 --> 0:42:13.839 than then. And then we had USHL to compail us 0:42:13.880 --> 0:42:16.520 out a few years after in two thousand and ten eleven. 0:42:16.760 --> 0:42:18.919 This time we might not have it. So I think 0:42:19.000 --> 0:42:23.319 it's it's just people, you know, people slowly realizing that 0:42:23.719 --> 0:42:26.000 prices have to go up and accepting it, and and 0:42:26.000 --> 0:42:28.919 and and then the price goes upen and all the 0:42:29.040 --> 0:42:32.120 usage of all that is not really necessarily get cut. 0:42:32.480 --> 0:42:35.560 So people were you know, driving for could end up 0:42:35.560 --> 0:42:37.680 taking the bus intead of taking the car, or people 0:42:37.800 --> 0:42:40.279 going for some long trip, well they do short trips. 0:42:40.360 --> 0:42:43.160 And the kind of things for for you demand to 0:42:43.200 --> 0:42:45.640 go down and for the market to be balanced. And 0:42:45.640 --> 0:42:48.399 the thing is if people if prices stay too low 0:42:48.440 --> 0:42:50.680 for too long, what happens is it can be what's 0:42:50.760 --> 0:42:53.560 gonna happen soon is that eventually you run out of 0:42:54.960 --> 0:42:57.880 inventories to deliver on the screen, and then the price 0:42:57.880 --> 0:43:01.320 can go anywhere. So it's very important that the price 0:43:01.880 --> 0:43:05.120 moved in line with fundamentals so that we don't run 0:43:05.120 --> 0:43:07.840 out of inventors eventually, because then it goes to you 0:43:07.840 --> 0:43:11.320 know anything, it can go anywhere um as a price. 0:43:11.600 --> 0:43:13.800 So I think that the process is that people you 0:43:13.840 --> 0:43:17.120 know generally get get used to it little by little um. 0:43:17.960 --> 0:43:20.399 And also you know, the economy is taking less oil 0:43:20.440 --> 0:43:23.960 per unit of GDP, so today for one unit of GDP, 0:43:24.120 --> 0:43:27.719 where we're using fifteen percent less oil than in in 0:43:27.760 --> 0:43:31.560 two thousand and eight. So also that justifies you know 0:43:31.680 --> 0:43:34.719 the fact that maybe to have the equionomy to have 0:43:34.800 --> 0:43:37.239 the same impact on the economy at the high price 0:43:37.239 --> 0:43:39.320 of two thousand and eight when it was one fifty 0:43:39.480 --> 0:43:42.759 might be actually closer today. So that's the way I 0:43:42.760 --> 0:43:46.200 think of it, And that's jolly. People get you know, 0:43:46.239 --> 0:43:48.560 they don't know, they get used to new prices and 0:43:48.560 --> 0:43:51.400 then accept it and and it is what you know. 0:43:51.560 --> 0:43:54.279 That's why it's a it's a long process. And and 0:43:54.360 --> 0:43:58.120 demand doesn't you know, go down right away because there's 0:43:58.160 --> 0:44:02.000 not a lot of there's no no identity. Really, yeah, 0:44:02.200 --> 0:44:04.719 it feels like this is a lesson that everyone is 0:44:04.800 --> 0:44:08.000 learning all at the same time. Pierre, thank you so 0:44:08.080 --> 0:44:11.040 much for coming on all thoughts. Really appreciate you taking 0:44:11.040 --> 0:44:14.640 the time during this very busy moment in markets to 0:44:14.880 --> 0:44:18.200 give us your thoughts, my pleasure. Thanks for patrinity, and 0:44:18.280 --> 0:44:20.200 you'll have a good rest of the day and good 0:44:20.239 --> 0:44:22.800 luck everything. Thanks Joe. I mean, I thought that was 0:44:22.840 --> 0:44:25.719 a very thoughtful conversation that actually wrapped up a lot 0:44:25.760 --> 0:44:29.320 of the different strands that we've been dealing with in 0:44:29.719 --> 0:44:33.120 separate episodes. But the thing that I keep coming back 0:44:33.120 --> 0:44:35.719 to is this idea that you know, any problem that 0:44:35.760 --> 0:44:39.600 can be solved with money probably isn't that big of 0:44:39.640 --> 0:44:42.120 a problem, which is actually, now that I think about it, 0:44:42.160 --> 0:44:45.719 a very mmt thing to say. But coming over to 0:44:45.760 --> 0:44:48.080 the dark set. That's not what I mean at all, 0:44:48.440 --> 0:44:50.680 but it is true that you know, even if you 0:44:50.760 --> 0:44:53.560 throw a lot of money at this problem, you know, 0:44:53.640 --> 0:44:56.640 you can't make the oil producers necessarily drill. Like it 0:44:56.640 --> 0:44:59.759 takes a while to ramp up capacity to build out 0:45:00.000 --> 0:45:02.640 alternative energy sources. And when you have a big shock 0:45:02.719 --> 0:45:05.279 like we just saw in Russia, that I mean, it 0:45:05.360 --> 0:45:09.080 just sort of destabilizes everything and it creates even more 0:45:09.239 --> 0:45:11.719 lead times that are very difficult to deal with. No, 0:45:11.920 --> 0:45:14.880 I think I had the exact same thought, And maybe 0:45:15.000 --> 0:45:17.160 it was like when he pointed out that, you know, 0:45:17.200 --> 0:45:20.160 we could be looking at seven year cycles for something 0:45:20.200 --> 0:45:22.480 like ramping up medals. And of course we're talking a 0:45:22.520 --> 0:45:25.440 lot about oil, but we saw the price of nickel 0:45:25.560 --> 0:45:30.400 go absolutely wild over this past week, and we're gonna 0:45:30.400 --> 0:45:33.080 need regardless of what happens right now, we're gonna need 0:45:33.120 --> 0:45:37.200 more nickel and other sort of other and other specific 0:45:37.239 --> 0:45:41.360 medals for car batteries and d vs, etcetera. The commodity 0:45:41.440 --> 0:45:44.160 that's in short of supply is kind of a cliche 0:45:44.320 --> 0:45:46.840 kind of galaxy brain is time, and that is like 0:45:46.880 --> 0:45:49.520 the one thing that no amount of money can fix. 0:45:49.560 --> 0:45:51.520 There's just a certain amount of time it takes to 0:45:51.520 --> 0:45:56.319 build a mind, and there's no immediate supply response. You know, 0:45:56.480 --> 0:45:58.760 maybe shale can ramp up with the next six months, 0:45:58.880 --> 0:46:01.040 but they're all kinds of other things they can't. I mean, 0:46:01.080 --> 0:46:03.200 the other thing that was quite worrying. So obviously it's 0:46:03.200 --> 0:46:08.560 concerning whenever anyone says two for barrel oil is a possibility. 0:46:08.880 --> 0:46:11.600 But the other thing that struck me was this idea 0:46:11.880 --> 0:46:17.439 of maybe something happens in the actual commodities market sort 0:46:17.480 --> 0:46:20.240 of similar to what we saw in March or April, 0:46:21.320 --> 0:46:25.319 but in reverse. So you know, someone can't ship out 0:46:25.440 --> 0:46:28.200 physical delivery of oil that they that they owe to, 0:46:28.719 --> 0:46:31.000 you know, to fulfill a futures contract, and at that 0:46:31.040 --> 0:46:34.160 point you get like a very big squeeze upwards in 0:46:34.239 --> 0:46:37.880 the price. It feels like that's a possibility. Yeah, I 0:46:37.880 --> 0:46:41.920 thought that was really interesting him talking about the scenario 0:46:41.920 --> 0:46:43.880 in which Russian oil could be out of the market 0:46:43.920 --> 0:46:45.880 for a long time. And so you have these companies 0:46:46.200 --> 0:46:49.400 self sanctioning, people call it or withdrawing, maybe partly for 0:46:49.520 --> 0:46:52.279 pr reasons, because they don't want to be perceived or 0:46:52.320 --> 0:46:54.600 in fact do not want to be a part of 0:46:54.920 --> 0:46:59.719 helping fund this war and then the oil piles up 0:47:00.080 --> 0:47:02.200 the docks at the ships, there's no more, and then 0:47:02.239 --> 0:47:04.640 you have to turn off production because there's literally no 0:47:04.680 --> 0:47:08.440 more place to story. And then you automatically, regardless of 0:47:08.440 --> 0:47:12.120 what happens, get this very long lead time before that 0:47:12.200 --> 0:47:14.560 supply can come on again. And I also thought it 0:47:14.600 --> 0:47:17.040 was interesting and this is gonna be a big question. 0:47:17.120 --> 0:47:20.920 Like the other side of the sanctions, Pierre's argument is 0:47:20.960 --> 0:47:24.120 that it will be very hard to lift them under 0:47:24.400 --> 0:47:28.439 the Putin administration. Is something to think about in terms 0:47:28.440 --> 0:47:30.799 of what are we looking at in terms of time frame. Again, 0:47:30.880 --> 0:47:32.319 I was about to say it goes back to time, 0:47:32.320 --> 0:47:35.920 because even if everything was resolved tomorrow, you know, in 0:47:35.920 --> 0:47:38.799 a ceasefire was actually declared, it seems very unlikely that 0:47:38.800 --> 0:47:41.360 you're going to get a complete roll back very quickly 0:47:41.400 --> 0:47:44.439 of everything that's just happened. From a sanctions perspective, under 0:47:44.480 --> 0:47:47.880 investment rules everything around me, I feel like every story 0:47:47.920 --> 0:47:50.400 comes back to that and the point about OPEC not 0:47:50.480 --> 0:47:52.879 even be able able to you know, normally we think 0:47:52.880 --> 0:47:56.280 of OPEC or OPEC plus members is cheating, always trying 0:47:56.320 --> 0:47:59.200 to sell more oil than they have, whereas right now 0:47:59.200 --> 0:48:01.359 the problem seems to be the opposite. All right, let's 0:48:01.400 --> 0:48:03.360 leave it there. All right, this has been another episode 0:48:03.360 --> 0:48:06.040 of the All Thoughts podcast. I'm Tracy Alloway. You can 0:48:06.080 --> 0:48:08.919 follow me on Twitter at Tracy Alloway and I'm Joe 0:48:08.960 --> 0:48:11.479 Why Isn't All? You can follow me on Twitter at 0:48:11.520 --> 0:48:14.520 the Stalwart. Follow our guest Pierre on d Round. He's 0:48:14.640 --> 0:48:17.120 at on Durron Pierre and I want to thank our 0:48:17.160 --> 0:48:20.920 producers call It Tipton and Magnus Hendrickson. Follow the Bloomberg 0:48:20.960 --> 0:48:24.520 head of podcast Francesco lead at Francesca Today, and check 0:48:24.560 --> 0:48:27.200 out all of our podcasts at Bloomberg under the handle 0:48:27.480 --> 0:48:29.680 at podcasts. Thanks for listening.