1 00:00:00,080 --> 00:00:01,680 Speaker 1: All right, well, let's get over to our next guests. 2 00:00:01,680 --> 00:00:04,480 Speaker 1: And joining us now is a Kylie Ghana, senior community 3 00:00:04,519 --> 00:00:08,639 Speaker 1: strategist and broke Decarlie Trading. She's had to discuss the 4 00:00:08,680 --> 00:00:13,399 Speaker 1: oil market ahead of that Wednesday decision from OPEQ plus. Kylie, 5 00:00:13,400 --> 00:00:15,920 Speaker 1: welcome to the program. And we've been reporting that well 6 00:00:16,000 --> 00:00:19,560 Speaker 1: yesterday that we were looking at a million dollars uh, sorry, 7 00:00:19,560 --> 00:00:22,880 Speaker 1: million barrels a day about put being cut. Today we're 8 00:00:22,880 --> 00:00:26,680 Speaker 1: talking perhaps as much as two million barrels a day, Karlie. 9 00:00:26,720 --> 00:00:28,040 Speaker 1: That I mean, you know, you do cut that much, 10 00:00:28,040 --> 00:00:30,920 Speaker 1: but it doesn't really change the supply picture as much 11 00:00:30,960 --> 00:00:35,360 Speaker 1: as one would think. Correct, correct, because OPEC is currently 12 00:00:35,720 --> 00:00:38,320 Speaker 1: missing their quotas anyway. So this is in my opinion, 13 00:00:38,680 --> 00:00:41,240 Speaker 1: OPEC is basically taking a page out of the Federal 14 00:00:41,280 --> 00:00:44,320 Speaker 1: Reserve playbook and that they're talking their book. Yeah, they're 15 00:00:44,360 --> 00:00:46,840 Speaker 1: not having as much success as the fedhead with interest rates, 16 00:00:46,840 --> 00:00:48,800 Speaker 1: but I think they're you know, they're going to continue 17 00:00:48,800 --> 00:00:50,599 Speaker 1: to try to do that. And I don't think we're 18 00:00:50,600 --> 00:00:53,440 Speaker 1: going to see a really big production cut tomorrow. I 19 00:00:53,479 --> 00:00:56,560 Speaker 1: could be wrong. OPECK is sometimes very difficult to predict, 20 00:00:57,080 --> 00:01:00,920 Speaker 1: but for political reasons and and just the purpose of 21 00:01:00,960 --> 00:01:03,640 Speaker 1: a cartel is to keep prices high, but to do 22 00:01:03,720 --> 00:01:07,200 Speaker 1: it in a way that doesn't ruffle anyone's feathers and 23 00:01:07,400 --> 00:01:12,160 Speaker 1: encourage others to either increase production like shale producers, or 24 00:01:12,560 --> 00:01:15,280 Speaker 1: um other consumers to come up with alternatives. So I 25 00:01:15,480 --> 00:01:17,880 Speaker 1: don't think they're going to make any really big drastic moves, 26 00:01:17,880 --> 00:01:21,240 Speaker 1: but I think it'll be a psychological move. Maybe half 27 00:01:21,280 --> 00:01:24,080 Speaker 1: a million, maybe a million. But either way, as you said, 28 00:01:24,120 --> 00:01:26,560 Speaker 1: it's probably not going to take that many barrels off 29 00:01:26,560 --> 00:01:29,160 Speaker 1: the market, if it does any at all. I saw 30 00:01:29,200 --> 00:01:31,840 Speaker 1: a couple of other interesting lines. One was that I'm 31 00:01:31,880 --> 00:01:35,160 Speaker 1: in Nassa. The CEO of Aramco in our story said 32 00:01:35,200 --> 00:01:38,800 Speaker 1: that spare capacity is is very low and there won't 33 00:01:38,840 --> 00:01:42,360 Speaker 1: be any left at all. One's China ends COVID zero. 34 00:01:42,400 --> 00:01:44,679 Speaker 1: Now we know that's not right around the corner, but 35 00:01:44,840 --> 00:01:48,280 Speaker 1: it's something that eventually will happen. And the other line 36 00:01:48,520 --> 00:01:51,840 Speaker 1: that was interesting was the energy tracker VORTEXA said that 37 00:01:51,920 --> 00:01:55,040 Speaker 1: China had already shipped in a record volume of fuel 38 00:01:55,080 --> 00:01:58,320 Speaker 1: oil from Russia last month because importers are out there, 39 00:01:58,600 --> 00:02:05,040 Speaker 1: you know, snatching up these these discounted um supply levels. Uh. 40 00:02:05,080 --> 00:02:08,120 Speaker 1: The way that I see it is. China will obviously 41 00:02:08,160 --> 00:02:11,280 Speaker 1: eventually come online. But luckily, UM, they're giving us a 42 00:02:11,360 --> 00:02:13,760 Speaker 1: chance to flatten the curve. We are seeing shale oil 43 00:02:13,800 --> 00:02:17,440 Speaker 1: producers very very very slowly coming up up to the plate. 44 00:02:17,520 --> 00:02:19,720 Speaker 1: The rig count in the US is coming up a little, 45 00:02:20,320 --> 00:02:24,960 Speaker 1: probably more from independent producers than the big companies. But 46 00:02:25,000 --> 00:02:28,840 Speaker 1: the reality of commodities is high prices always cure high prices, 47 00:02:28,840 --> 00:02:30,720 Speaker 1: and that's exactly what we've seen here in the last 48 00:02:30,720 --> 00:02:33,080 Speaker 1: couple of months. If you look at a really big 49 00:02:33,120 --> 00:02:35,680 Speaker 1: picture chart of the s I'm sorry of crude oil. 50 00:02:36,360 --> 00:02:39,240 Speaker 1: We had we not had the COVID meltdown and then 51 00:02:39,280 --> 00:02:44,520 Speaker 1: again the Russian Ukraine Ukraine situation this year. Uh. Those 52 00:02:44,560 --> 00:02:47,560 Speaker 1: two events pushed prices well beyond what probably would have 53 00:02:47,600 --> 00:02:51,640 Speaker 1: been a normal band of of price discovery. Uh. But 54 00:02:51,760 --> 00:02:53,840 Speaker 1: since then, now that things have calmed down a little bit, 55 00:02:53,840 --> 00:02:55,680 Speaker 1: we're right in the middle of a trading range that 56 00:02:55,760 --> 00:02:58,720 Speaker 1: probably should have existed had those two events not occurred. 57 00:02:58,760 --> 00:03:01,639 Speaker 1: In my view from a charting standpoint, I think we've 58 00:03:01,639 --> 00:03:07,720 Speaker 1: got an upside of about limit. And then on the downside, 59 00:03:07,720 --> 00:03:09,320 Speaker 1: I think, believe it or not, I think we will 60 00:03:09,360 --> 00:03:12,200 Speaker 1: see sixty five even if China comes back online. I 61 00:03:12,240 --> 00:03:16,800 Speaker 1: think between demand destruction and other things going on, possibly 62 00:03:17,200 --> 00:03:19,919 Speaker 1: if the dollars stays lofty, that will eventually continue to 63 00:03:19,919 --> 00:03:22,640 Speaker 1: work against Doyle. The big relly we've seen in the 64 00:03:22,720 --> 00:03:25,320 Speaker 1: last couple of days is largely a dollar story, not 65 00:03:25,400 --> 00:03:28,640 Speaker 1: necessarily an OPEC story, Carli. When you look at the 66 00:03:28,639 --> 00:03:32,280 Speaker 1: the oil market as it is at the moment, you know, 67 00:03:32,440 --> 00:03:34,680 Speaker 1: and as it was, let's say, about five years ago, 68 00:03:35,160 --> 00:03:37,640 Speaker 1: it seemed almost as a shale was the sort of 69 00:03:37,680 --> 00:03:40,920 Speaker 1: swing producer. What's happened to change that? Because it doesn't 70 00:03:40,920 --> 00:03:44,560 Speaker 1: seem to be as influential as they were before. No, 71 00:03:44,720 --> 00:03:47,120 Speaker 1: You're absolutely right, they've they've taken a step back. I 72 00:03:47,120 --> 00:03:49,240 Speaker 1: think they got burned a few too many times, and 73 00:03:49,240 --> 00:03:52,400 Speaker 1: and now they're a little bit cautious. They're listening to shareholders. 74 00:03:52,600 --> 00:03:55,920 Speaker 1: I think there are some the pendulum swings wildly in 75 00:03:55,960 --> 00:03:59,720 Speaker 1: both directions, and I think it uh probably between you know, 76 00:03:59,760 --> 00:04:04,480 Speaker 1: the energy revolution, pressure from shareholders and politicians and things 77 00:04:04,520 --> 00:04:07,760 Speaker 1: like that obviously went to one side of the equation, 78 00:04:07,800 --> 00:04:09,520 Speaker 1: and now I think we're swinging back to the other. 79 00:04:09,840 --> 00:04:12,600 Speaker 1: It'll just take some time. Unfortunately, UM, it's not something 80 00:04:12,640 --> 00:04:15,960 Speaker 1: you can snap your fingers and it happens. But I don't. 81 00:04:16,040 --> 00:04:18,760 Speaker 1: I think all of us could agree it's the US 82 00:04:18,839 --> 00:04:20,880 Speaker 1: isn't a better spot if we produce our own energy. 83 00:04:21,440 --> 00:04:24,240 Speaker 1: So I think that's eventually going to happen. Again, just 84 00:04:24,279 --> 00:04:26,040 Speaker 1: looking at the charts, and you touched on this a 85 00:04:26,040 --> 00:04:28,200 Speaker 1: little bit already, looking at the charts over the past 86 00:04:28,640 --> 00:04:31,240 Speaker 1: six to nine months, you got up there around one 87 00:04:31,279 --> 00:04:34,240 Speaker 1: twenty and down to about seventy five or so, and 88 00:04:34,320 --> 00:04:37,000 Speaker 1: it seems like there's it feels like around ninety is 89 00:04:37,040 --> 00:04:41,000 Speaker 1: this sort of median level there is? That? Is that 90 00:04:41,160 --> 00:04:43,039 Speaker 1: something if you really wanted to look out over the 91 00:04:43,040 --> 00:04:48,680 Speaker 1: next six months, that is kind of where prices might hover. Absolutely, 92 00:04:48,680 --> 00:04:51,599 Speaker 1: I think night somewhere around let's just say the low nineties, 93 00:04:51,600 --> 00:04:53,559 Speaker 1: because this is a messy market and picking in exact 94 00:04:53,680 --> 00:04:57,479 Speaker 1: numbers impossible, but somewhere in the low nineties is a 95 00:04:57,560 --> 00:05:00,719 Speaker 1: significant pivot area. If prices stay below that, as I 96 00:05:00,800 --> 00:05:03,400 Speaker 1: suspect they will, I think that we continue to see 97 00:05:03,400 --> 00:05:08,320 Speaker 1: the overall down trend. If prices poke above let's say 98 00:05:08,440 --> 00:05:10,359 Speaker 1: or so, that might prove me wrong and maybe we 99 00:05:10,400 --> 00:05:12,279 Speaker 1: go much higher. I don't think that's going to happen. 100 00:05:12,320 --> 00:05:14,800 Speaker 1: I think that um Like I said, with all the 101 00:05:14,839 --> 00:05:16,560 Speaker 1: things going into China and some of the other things, 102 00:05:16,640 --> 00:05:18,680 Speaker 1: I think we're flattening the curve and giving ourselves a 103 00:05:18,760 --> 00:05:21,080 Speaker 1: chance to catch up on some of the stuff. Hopefully 104 00:05:21,080 --> 00:05:25,280 Speaker 1: that's the case very quickly. Uh what do you how 105 00:05:25,320 --> 00:05:27,840 Speaker 1: do you see a large cup playing out with regards 106 00:05:27,839 --> 00:05:35,000 Speaker 1: to the global energy crunch? Well, I mean, the one 107 00:05:35,040 --> 00:05:38,600 Speaker 1: thing that I'm paying attention to primarily here because supply 108 00:05:38,640 --> 00:05:43,279 Speaker 1: demand fundamentals are really uh, they're They're tough to figure 109 00:05:43,279 --> 00:05:45,960 Speaker 1: out in real time. So what I'm looking at is correlations. 110 00:05:46,000 --> 00:05:49,200 Speaker 1: I've noticed that the correlation between the SMP five hundred, 111 00:05:49,279 --> 00:05:52,599 Speaker 1: the Treasury notes, gold, and crude oil are all about 112 00:05:53,160 --> 00:05:56,240 Speaker 1: negative to the US dollar, meaning the dollars really driving 113 00:05:56,240 --> 00:05:58,400 Speaker 1: the ship here. So what we really need to see 114 00:05:58,480 --> 00:06:01,600 Speaker 1: is the dollar stabilize and then we can start seeing 115 00:06:01,600 --> 00:06:05,159 Speaker 1: price discovering commodities. Okay, thanks so much, Carlie. Carlie Garner, 116 00:06:05,200 --> 00:06:08,800 Speaker 1: a senior commodity strategist and broker at Decarli Trading.