Speaker 1: All right, well, let's get over to our next guests.
Speaker 1: And joining us now is a Kylie Ghana, senior community
Speaker 1: strategist and broke Decarlie Trading. She's had to discuss the
Speaker 1: oil market ahead of that Wednesday decision from OPEQ plus. Kylie,
Speaker 1: welcome to the program. And we've been reporting that well
Speaker 1: yesterday that we were looking at a million dollars uh, sorry,
Speaker 1: million barrels a day about put being cut. Today we're
Speaker 1: talking perhaps as much as two million barrels a day, Karlie.
Speaker 1: That I mean, you know, you do cut that much,
Speaker 1: but it doesn't really change the supply picture as much
Speaker 1: as one would think. Correct, correct, because OPEC is currently
Speaker 1: missing their quotas anyway. So this is in my opinion,
Speaker 1: OPEC is basically taking a page out of the Federal
Speaker 1: Reserve playbook and that they're talking their book. Yeah, they're
Speaker 1: not having as much success as the fedhead with interest rates,
Speaker 1: but I think they're you know, they're going to continue
Speaker 1: to try to do that. And I don't think we're
Speaker 1: going to see a really big production cut tomorrow. I
Speaker 1: could be wrong. OPECK is sometimes very difficult to predict,
Speaker 1: but for political reasons and and just the purpose of
Speaker 1: a cartel is to keep prices high, but to do
Speaker 1: it in a way that doesn't ruffle anyone's feathers and
Speaker 1: encourage others to either increase production like shale producers, or
Speaker 1: um other consumers to come up with alternatives. So I
Speaker 1: don't think they're going to make any really big drastic moves,
Speaker 1: but I think it'll be a psychological move. Maybe half
Speaker 1: a million, maybe a million. But either way, as you said,
Speaker 1: it's probably not going to take that many barrels off
Speaker 1: the market, if it does any at all. I saw
Speaker 1: a couple of other interesting lines. One was that I'm
Speaker 1: in Nassa. The CEO of Aramco in our story said
Speaker 1: that spare capacity is is very low and there won't
Speaker 1: be any left at all. One's China ends COVID zero.
Speaker 1: Now we know that's not right around the corner, but
Speaker 1: it's something that eventually will happen. And the other line
Speaker 1: that was interesting was the energy tracker VORTEXA said that
Speaker 1: China had already shipped in a record volume of fuel
Speaker 1: oil from Russia last month because importers are out there,
Speaker 1: you know, snatching up these these discounted um supply levels. Uh.
Speaker 1: The way that I see it is. China will obviously
Speaker 1: eventually come online. But luckily, UM, they're giving us a
Speaker 1: chance to flatten the curve. We are seeing shale oil
Speaker 1: producers very very very slowly coming up up to the plate.
Speaker 1: The rig count in the US is coming up a little,
Speaker 1: probably more from independent producers than the big companies. But
Speaker 1: the reality of commodities is high prices always cure high prices,
Speaker 1: and that's exactly what we've seen here in the last
Speaker 1: couple of months. If you look at a really big
Speaker 1: picture chart of the s I'm sorry of crude oil.
Speaker 1: We had we not had the COVID meltdown and then
Speaker 1: again the Russian Ukraine Ukraine situation this year. Uh. Those
Speaker 1: two events pushed prices well beyond what probably would have
Speaker 1: been a normal band of of price discovery. Uh. But
Speaker 1: since then, now that things have calmed down a little bit,
Speaker 1: we're right in the middle of a trading range that
Speaker 1: probably should have existed had those two events not occurred.
Speaker 1: In my view from a charting standpoint, I think we've
Speaker 1: got an upside of about limit. And then on the downside,
Speaker 1: I think, believe it or not, I think we will
Speaker 1: see sixty five even if China comes back online. I
Speaker 1: think between demand destruction and other things going on, possibly
Speaker 1: if the dollars stays lofty, that will eventually continue to
Speaker 1: work against Doyle. The big relly we've seen in the
Speaker 1: last couple of days is largely a dollar story, not
Speaker 1: necessarily an OPEC story, Carli. When you look at the
Speaker 1: the oil market as it is at the moment, you know,
Speaker 1: and as it was, let's say, about five years ago,
Speaker 1: it seemed almost as a shale was the sort of
Speaker 1: swing producer. What's happened to change that? Because it doesn't
Speaker 1: seem to be as influential as they were before. No,
Speaker 1: You're absolutely right, they've they've taken a step back. I
Speaker 1: think they got burned a few too many times, and
Speaker 1: and now they're a little bit cautious. They're listening to shareholders.
Speaker 1: I think there are some the pendulum swings wildly in
Speaker 1: both directions, and I think it uh probably between you know,
Speaker 1: the energy revolution, pressure from shareholders and politicians and things
Speaker 1: like that obviously went to one side of the equation,
Speaker 1: and now I think we're swinging back to the other.
Speaker 1: It'll just take some time. Unfortunately, UM, it's not something
Speaker 1: you can snap your fingers and it happens. But I don't.
Speaker 1: I think all of us could agree it's the US
Speaker 1: isn't a better spot if we produce our own energy.
Speaker 1: So I think that's eventually going to happen. Again, just
Speaker 1: looking at the charts, and you touched on this a
Speaker 1: little bit already, looking at the charts over the past
Speaker 1: six to nine months, you got up there around one
Speaker 1: twenty and down to about seventy five or so, and
Speaker 1: it seems like there's it feels like around ninety is
Speaker 1: this sort of median level there is? That? Is that
Speaker 1: something if you really wanted to look out over the
Speaker 1: next six months, that is kind of where prices might hover. Absolutely,
Speaker 1: I think night somewhere around let's just say the low nineties,
Speaker 1: because this is a messy market and picking in exact
Speaker 1: numbers impossible, but somewhere in the low nineties is a
Speaker 1: significant pivot area. If prices stay below that, as I
Speaker 1: suspect they will, I think that we continue to see
Speaker 1: the overall down trend. If prices poke above let's say
Speaker 1: or so, that might prove me wrong and maybe we
Speaker 1: go much higher. I don't think that's going to happen.
Speaker 1: I think that um Like I said, with all the
Speaker 1: things going into China and some of the other things,
Speaker 1: I think we're flattening the curve and giving ourselves a
Speaker 1: chance to catch up on some of the stuff. Hopefully
Speaker 1: that's the case very quickly. Uh what do you how
Speaker 1: do you see a large cup playing out with regards
Speaker 1: to the global energy crunch? Well, I mean, the one
Speaker 1: thing that I'm paying attention to primarily here because supply
Speaker 1: demand fundamentals are really uh, they're They're tough to figure
Speaker 1: out in real time. So what I'm looking at is correlations.
Speaker 1: I've noticed that the correlation between the SMP five hundred,
Speaker 1: the Treasury notes, gold, and crude oil are all about
Speaker 1: negative to the US dollar, meaning the dollars really driving
Speaker 1: the ship here. So what we really need to see
Speaker 1: is the dollar stabilize and then we can start seeing
Speaker 1: price discovering commodities. Okay, thanks so much, Carlie. Carlie Garner,
Speaker 1: a senior commodity strategist and broker at Decarli Trading.