Monkey’s Market Minute w/c September 19th, 2022

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September 19th, 2022

In “supply go down” news: US energy producers are warning that “no bailout is coming”. The US can’t pump more, shale producers aren’t going to be significantly increasing production through 2023, and the largest shale basins are drying up much faster than expected. The money quote in the article says that “Europe can thank the Democrats and the Biden administration for their war against the US energy industry that led to massive divestments across the sector, which crippled oil production growth and refining capacity, and pressured/shamed the world into withdrawing any capital allocations to fossil fuels”. […]

September 20th, 2022

Biden has predictably announced an expansion of the SPR drain, which was previously supposed to end in October, but which has now been expended through November. I fully expected this, and also anticipate that they’ll extend the SPR dumps through the winter to the Spring of 2023. […]

September 21st, 2022

Regarding the nationalization of the energy sector in Europe, Germany is reported to be nationalizing Uniper as soon as next week, and France is nationalizing their nuclear industry. Also, the EU is drafting emergency powers to force companies to produce key products and stockpile goods regardless of what the businesses want, or else face significant fines. […]

September 22nd, 2022

The EIA reported a 1.1 million barrel build, but no longer reports how much oil is being drained from the SPR (I wonder why). However, in the original report (not in the article from oilprice), it notes that crude oil inventories are 2% BELOW what they were this time last year, and that’s WITH the massive SPR dumps (which again, are no longer being reported by the EIA). When you get into the original report, all supply is down significantly from this time last year (i.e. September 2021) when oil prices were much cheaper. […]

September 23rd, 2022

The markets are still unsure how to process a combination of a Russian escalation in Ukraine, Biden’s accelerated SPR dumps, and falling oil demand due to Autumn combined with an energy crisis in Europe and elsewhere. It’s a tug-o-war, which is why prices are flat. I think OPEC has the power to tip the scales in favor of higher prices by announcing production cuts or something. […]

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