Commodity Research Group (CRG) is an independent research consultancy specializing in base and precious metals, as well energy products. The Group provides research and general price analysis for these markets, along with advice to companies seeking to construct hedging strategies.
In this podcast, Andrew Lebow and Jim Colburn discuss the latest economic trends and supply and demand factors affecting oil prices.
About the Experts
Andrew Lebow has been involved in the energy derivative area since 1980. He began his career with Shearson Lehman Brothers where he worked in the initial formulation and marketing of the NYMEX WTI crude contract in 1983 as well as the NYMEX gasoline contract in 1985.
Mr. Lebow has appeared before the State Government of Alaska as well as the State Department of Defense to discuss hedging techniques. Mr. Lebow is also well known as a market analyst and is quoted frequently in the financial press. He has appeared on television on CNBC, NBC, CNN, CBS, and PBS. Mr. Lebow holds a BA from Lafayette College and an MBA from the Kellogg School of Management at Northwestern University.
Jim Colburn is a futures and options professional with 30 years of wide ranging experience in commodity markets. For much of his career, at Man Financial (1989-2011) and Jefferies LLC (2012-2013), Mr. Colburn worked with major integrated oil companies, hedge funds, pension funds and other entities to develop market hedging and trading strategies.
He has conducted trading, hedging and risk management workshops in energy markets worldwide.
Mr. Colburn is a published author on options trading, hedging, market making and risk management. In 1986, while at the New York Mercantile Exchange, Mr. Colburn helped develop new markets in energy option contracts by educating the oil industry, banks, floor traders and brokers, worldwide.
Speaker 1: (00:03)
Good morning. This is Jim Colburn of commodity research group. I’m with Andy Lebow also of commodity research group and we’re here to talk about energy markets along with Ed Meir. Andy and I founded commodity research group, which consults on various aspects of commodity markets. Check out our website, commodity research group.com where we post our monthly commodity reports, our blog, and our podcast. We would like to thank our friend Doug Stetzer of EKT interactive oil and gas training for hosting this podcast. You can check out his daily newsletter, podcast and learning email@example.com. This podcast should be construed as market commentary, merely observing economic, political, and market conditions. And it’s not intended to refer to any particular trading system. We are not responsible for for trading decisions taken by anyone, not attended to. Listen, information is not guaranteed to be accurate. This is not an offer to buy herself. And he threw it. This today is August 1st.
Speaker 2: (01:16)
Speaker 1: (01:18)
Andy. A Lot’s happened since our last podcast and early July. Market’s rallied significantly. Um, why don’t you, don’t, we start off by you recapping what’s been going on and, um, um, maybe talk about, uh,
Speaker 3: (01:34)
what’s going on with OPEC. Okay. You’re, I don’t even know where to start on, uh, on the recap, but, uh, maybe, maybe we’ll start with OPEC because that’s usually in the, in the oil markets is a good place to, a good place to start. And, uh, actually during the, during the month of July, they had what I think was a, was a pretty successful monitoring committee meeting and they’re meeting again, um, I think it’s August 7th to keep talking. And, uh, what they have been talking about is their production and compliance and what to do to try to reign in Nigeria. And, uh, I, I think they’re going to be pretty successful, uh, at least on the August numbers. And apparently the market is also gaining some confidence that we’ll see some OPEC production cut backs, uh, during the month of, uh, during the month of August and maybe into September as well.
Speaker 3: (02:40)
A Saudi has pledged to reduce their exports by 300 a day. Of course some of that is seasonal because they increased, they increased demand for their crude and burning for electricity, for air conditioning. Uh, but I think you’re also going to get production cutbacks from Kuwait and the UAE. Uh, and I, I think one has to wonder how much Libya and Nigeria, uh, are actually going to be able to increase production from current levels. I think Libby is the, they’re at a million barrels a day that I don’t see that going any higher. In fact that Michael Lauer and Nigeria is already, they’re talking about going to 2 million barrels a day, which, which, uh, sort of freaked the market out last month. But, uh, they’re probably at like one eight maybe. And uh, you know, the, they’re already having some, some issues with the Niger river delta. So, um, I, I think that Nigerian production is going to go down. So I think OPEC production in August and into September, it’s going to go down.
Speaker 1: (03:49)
So I think you had the number went down maybe a half a million barrels a day.
Speaker 3: (03:54)
Yeah. That may be a little optimistic. Um, but maybe 300 to 500 a day. Um, some of that is going to be, uh, Nigeria, um, some declines from Nigeria, some from, uh, uh, Olivia May have, may be able to hang at a, at a million, but I think they are going to go down the nine and the Persian Gulf producers as well, like going to reduce production. Iraq is having some problems in the north. So, uh, there July numbers are going to be down a shade and a August. This is going to be down as well. So what does that mean? I think that’s a big question. Uh, and
Speaker 1: (04:36)
yeah, basically what’s, what’s the call on OPEC crude oil going over the next, this, the end of this quarter and next quarter?
Speaker 3: (04:44)
Well, I think, I think that you look at the call on OPEC crude for, uh, the third quarter and it’s probably going to be around 33.3 a and maybe a shade lower than that for fourth. So if OPEC is producing, let’s say 30 to five, 30 to six, something like that, maybe a little lower, maybe a little higher. But you know, we’re going to have, we’re going to have a deficit. And we’ve been talking about Jim now lawyer, we’ve been talking about this at least a year at least. Right. And we still pick it at least until the last, um, you know, until they made the agreement, we were saying, all right, first quarter, that’s not going to look so good. Second quarter I’d allow, you know, it’s probably going to take, they’re to have some issues, uh, the third quarter it really is going to happen. Uh, uh, you know, why it’s happening, it’s happening happening.
Speaker 1: (05:46)
You know, that something that’s been going on as you know, in a, in the marketplace is with these commodities spread options. And we’ve seen the, uh, the open interest on the, on the call. So, you know, I don’t know if they’re speculators are hedges or what, but there’s been a lot of open interest on that, on the flat call for, you know, the whole year for 2017. So, so finally it looks like they’ve got, maybe they have a shot in the fourth quarter. I don’t know how to go to go up for this market to go, uh, uh, backwardated do you think with this
Speaker 3: (06:18)
in the fourth quarter or, I mean, you look at it came close, you know, actually next free, it might, it might have gone backward, but it’s hard to say. But you know, you look at some of the, uh, like forties is trading above the, uh, you know that it’s trading 46 is a, um, physical crude and that’s trading above the, um, nearby futures, which is a, uh, brand forties Oseberg Ekofisk, um, blend, um, lended price. So that’s training backward dated, you know, the one thing to watch these red, these red DCE for Brant, uh, made a huge move, optin quite make backwards, but this, read these, which is d 17 versus these 18, a very carefully watched spread by everyone in the market. Uh, that went, uh, that, that went flat to a little bit higher the other day from minus $2 just a few weeks ago. So, you know, that’s, that’s an interesting spread because,
Speaker 1: (07:25)
you know, it takes away, if you could, if you think that there was some major short covering going on in this rally, I mean, that would have, that would occur, the buying would occur on the front end. So, and, and then as the market rallied, if you expected to see some hedging that would probably take place out to that to 2018 so that would kind of make sense that that’s spread should move like that. Right?
Speaker 3: (07:50)
Yeah, totally. And I think that’s what we, you know, that’s what we saw. We probably saw some hedging in in Cali teen. I don’t know if there was a lot of hedging and we’ll talk about that, um, in a bit. But I think that’s one of the reasons why that’s spread. Uh, made a big move, as you mentioned, short covering in the front and hedging in the back, which makes complete sense. But Jim and the, in our last podcast we talked about, well, what do we want to see to get, you know, that would make us, you know, make us constructive on the market. And one of the main things we wanted to see was that the structure started to improve and we saw it. It happened. Yes. You know, it totally happened. And so it’s pretty, it’s bullish.
Speaker 1: (08:36)
Yes. It’s, it’s, uh, yeah, I mean, if I look at those flat calls, there’s 35,000 open interest on, you know, the AUC, Novi, Novi, DCE these chance. So that’s, that’s significant. That’s a, you know, hey, he just said it was a lot of people betting that we’re going into backwardation because there’s an equal amount of people that sold the thing, so, right. We’re seeing it happening. So, um, uh, anyway, uh, let’s, let’s talk about, um, US production since we’re on that, on the supply side. Um, you know, there’s, there’s been talk that the US growth is starting to flatten out and, and, um, I think, I dunno, I think, I think, uh, it’s a little biased because we’re getting declines in Alaska and also the rig counts, I guess, had been flattening out a little bit. What did variety, what do you want to say about it?
Speaker 3: (09:33)
And the other thing that’s going on, you know, the, uh, for the second month in a row, the doe on the May numbers, the, the, that are the final numbers, there are weekly numbers for our listeners. They’re there, the numbers come out every week and they are subject to a revision by the EIA based on the final data that comes in. So, and that comes out in the petroleum supply monthly at the end of, uh, the month and the end of the, for instance, a July 3rd, the one for May just came out on July 31st. So you look at those and you get at least a little bit better idea of what went on. Maybe not so much as what’s going to go on or what’s happened or what could happen. But for the second month in a row, the EIA, um, revise downward us production, uh, from the weeklies, the weeklies for like for May, we’re like nine, three I think.
Speaker 3: (10:32)
And it came in at 9.17 was it was the final numbers. So these higher weekly reports, uh, are, um, you know, this stuff not only subject to revision, but we, you know, we have to look at them through a different prism and, uh, you know, they may not be all that realistic and let you know, looking forward, I think us production is at least the title of production is going to continue to grow. Offshore production is going to continue to grow, but not as much as, uh, maybe some of the optimistic forecasts in, uh, just, you know, just a few months ago, at least the first quarter, early second quarter. Uh, I think, I think these production numbers are gonna are gonna come in a little bit shorter than what many people had expected. Um, and the other thing that’s, you know, I dunno, uh, the market’s beginning to, I think as we get a, to take a realization, even though these numbers, uh, we’re certainly way ahead of year ago, but demand for crude is a way, is way ahead of a year ago. And that’s the key. You know, again, I think we pointed this out over the, our last few podcasts, you know, the refinery runs, so it just completely out of control. I mean really high way higher. Nah, you know, many of us at four can, I know I didn’t have any of these numbers, you know, in my forecast.
Speaker 1: (11:59)
Well, I mean, part of that, don’t you think part of that is because of a, the Mexico refinery issues maybe, um, are, are we exporting to Venezuela as well? Products and, and, but definitely, you know, the Latin America demand South American demand, I don’t Dunno if it’s a, so much an increase in demand as it is a problem with their, their, their, uh, refinery assets.
Speaker 3: (12:23)
Right. That’s a good point because, uh, you know, as much as we produce, we, we’ve, we’re still drawing gasoline stocks, so it was still drawing diesel stocks and, and that’s because gasoline and diesel are going, you know, going abroad, they’re going to look to Latin America. So we’ve made up for some of the problems and, uh, in Latin America and as you mentioned, Joe Venezuela and Mexico being, uh, you know, to, to uh, to, to refining to refinery a two refineries that when that have had problems, you know, to refinery refining assets that, that are really, um, struggled.
Speaker 1: (13:06)
So, so my question is if, if, um, you know, if we’re supporting, if the u s refinery system is, it is also supporting, uh, South America, Latin America in a bigger way, are we getting a false sense of a market strength by watching the, um, uh, huge declines that we’ve seen over the last few weeks? Or is this just going to continue?
Speaker 3: (13:34)
I don’t see the, uh, refining situation in South America getting a whole lot better. Uh, it still could get worse. Now Mexico is, is restarting that a big refinery they tried last night. I don’t, I don’t know how successful they were. Um, and then talking to, uh, industry sources, you know, they, they’re all pretty doubtful that a, that refinery is going to have a clean restart. It still could be weeks. It still could be weeks away in Venezuela, uh, obviously is having some, uh, some major, major issues. So, uh, and it isn’t as though, um, any of the, it isn’t as though a lot of the Latin American assets are old and need, uh, need repair, need, need maintenances. And with low oil prices, it hasn’t been all that easy. So I don’t see that changing. And I think, I think demand from Latin America maybe not so much invest oil about, I think Brazil looks like demand.
Speaker 3: (14:36)
This is beginning to beginning to come back. Emerging markets certainly they’re doing a whole lot better. So, um, you know, I, I think us runs are going to stay at a, at a relatively elevated level and we’re going into Mesas, uh, in September and October. But I think, I think our runs are going to stay high. And Jim, just, just yesterday or Sunday, uh, the biggest refinery in Europe, editor had a fire, those shell Pernice for finery and Netherlands. So, uh, you know, us, we’re, we’re going to have to make up some of, uh, some of the loss production there. Right. And, um, we, we’ve seen the arm open up, is that correct? And right. New York harbor, the gas alarm, the arm for gasoline has opened it to New York harbor. So the, we’re probably going to get some more gasoline into the northeast at the same time.
Speaker 3: (15:31)
However, uh, the yard for diesel out of the Gulf Coast to Europe, this is wide open. So I think there’ll be a, I think there’ll be diesel exports in our diesel exports are going to continue to, uh, continue to grow. And that’s the other thing, you know, the, another bullish link in the market is that this has been a, a product led rally. You know, we’re seeing, um, the margins have been strong. The cracks have been really strong. Uh, gasoline and diesel are outpacing crude and that, that too, you know what, that when you get a product led rally that’s pretty constructive. Yes. I think when we were at the lows, you know, about a month ago, um, even as crude was making a Lowe’s, those spreads were holding up quite well. So it was kind of, you know, that the crude structure was okay. Wasn’t writings in quantum apart and then the cracks are doing well too.
Speaker 3: (16:31)
Yeah. The cracks of it too unwell. So, um, something to keep an eye on. Definitely something I could keep an eye on. And I think, you know, we were writing in art in our monthly report, you know, you really don’t want to be selling cracks and August because you never know. And a big refinery globally could go down. It’s sure enough, sure enough was barely dry on that report when the purchaser fiery went. So, and we’ve been running, you know, that’s the other issue. We’ve been running our refineries in the Gulf coast and mid continent, you know, they’re, they’re running, they’re running humongous levels, you know, in the 90 percentile. So we’ll, we’ll see how well our refineries do during the month of August and September before they, uh, need to take a maintenance. Yeah. And also, I think when hurricanes come through, we, we’ve learned maybe the hard way that it’s just doesn’t take out a production and in the Gulf of Mexico, but it also can take out refineries.
Speaker 3: (17:31)
So you get a more, you get a bigger effect on the cracks then you do on the outright prices. Is that right? And we learned that from Katrina, Hailey this right. And it feels, I can’t remember that on this Rita, right. It was one right after it and say, right, yeah, yeah, we definitely learned that, uh, it’s really the refineries to take the bigger hit than the, uh, than the production. Of course. It depends on the path that hurricane Wa what happens. Right, right. But the point is, I mean, if as you get closer to the end of the gasoline season, you would think that it might be ripe for a selling opportunity. And, um, you know, you, it’s what you’re saying is a, I would the accountant, I don’t even know. Contra cyclical move could be deadly. That right? Yeah, definitely. So, you know, they all look, you know, the, the cracks do look extended, but, and I think they’re going to pull back.
Speaker 3: (18:31)
But, uh, you know, I wouldn’t be for, certainly for speculative, I wouldn’t be selling on my think, you know, maybe for a heterosis these are good numbers to lock into a certain percentage of their, uh, of their crude Ron. Uh, but, you know, to speculative stay away. Right. I want to move towards the last few. I know these weekly numbers have lots of noise, but, um, we’ve seen some really sharp declines and products. We’ve touched on this already. Um, can you just talk about what’s happened over the last few weeks and then what you expect to happen through, uh, the month of August? I think that, uh, first of all we’ve seen some really sharp crude stock draws on going to a two major factors. One a which we alluded to, the, the high crude runs and are a net imports, which are imports minus exports are, um, you know, are declining.
Speaker 3: (19:34)
They’re not coming in, they’re not high enough, or in other words, imports are not high enough to cover the increase in crude runs and a exports. So as a result, uh, you know, we’re seeing the, these, uh, really sharp draws, we’ve tron 26 million over the last four weeks. I mean that, that’s, you know, those are, those are big draws of certainly we’re coming from a higher number, but, uh, you know, we’re, we’re, we’re getting closer to balance. We’re still like 80 million over the, the for your average, are you counting SBR numbers that, no, that’s the other thing. That’s the thanks Jim. The SPR has done in terms of now for now, for now. So that’s, you know, that’s something that that’s supportive to the market. The, there may be some further sales down the road, but this particular tronches is over. We sold 17 million. Uh, and the majority of that went into domestic inventory was an export, but I’m talking about exports are at, our exports are the main number that was, it was revised upwards, um, and are running, uh, running pretty strong now, uh, all over the globe.
Speaker 3: (20:52)
India just took, took some, China, took some us, US sweet crudes. So, um, our exports are running high. So I think that in August, again, I think barring a, uh, refinery mishap, which again could happen, but I think we’re going to continue to draw. And you look at the, you look at the products they’ve been gasoline, Andis look, gasoline went from looking bad, you know, in terms of inventory to looking great in four or five weeks because demand has been us demand has been surging and we’ve been getting export demand. Um, and I think the US demand being so strong, uh, is not a big surprise because miles driven is, is a record. The pump prices are relatively benign. The economy is okay. There are jobs. So I think earlier in the year there were, you know, the, the gasoline numbers for a little volatile. Uh, but disappointing, I think that as we head into, as we head into August and September there they’re going to be, I think they’re going to be solid.
Speaker 3: (21:59)
I think that August and Seth, we’re going to be record actually. Um, and these will demand to is, is beginning to really, um, well all year it’s been good. Uh, it was revised downward in May, but I think diesel demand is going to be pretty, pretty solid too. We, we’re seeing manufacturing growth and uh, um, we’re seeing manufacturing and mining growth, uh, the, the mining growth, which includes gas and oil, um, production, uh, and that, that of course leads to higher demand for trucking. Those numbers are really the strong, particularly the men mining and manufacturing output. Um, pardon me, the mining output is up, uh, significantly. Oh, it’s 8% over a year ago. So, um, diesel demand should be steady, a steady to hire and I think these will stocks are going to be flat to maybe decline gasoline stocks. I think they’re going to decline in August and crude stocks. It’s going to continue to decline. A cushion to should, should all continue to decline.
Speaker 1: (23:10)
Cushing crude numbers, uh, have just plummeted. I mean, it’s just amazing how much, uh, the stock levels have dropped in it. Um, I’ll tell you, I look at the, uh, there’s a great EIA. Eia has some great numbers in their webs, a website. Um, but this week in petroleum, they do a little summary of, of their weekly numbers and they do, they show the a day supply chart and all of these are looking all these crude oil, gasoline heating or looking much better than, um, than they did. Obviously it’s a year to year, but, uh, still
Speaker 3: (23:46)
we’re moving in if, if you’re bullish, we’re a, we’re moving in the right direction, but we’ve made a big move. So I think there should be made a big book. Yeah, we made a big move. So the question is how much it’s already been discounted and you know, where, where, where can the market go? Um, which we’ll talk about in a second. I just did want to mention, you know, so we’ve seen total inventory, so over the last four weeks have declined 36 million barrels since June 23rd. So that, that’s like a nice solid, you know, almost a million barrels a day decline. It’s amazing. You know, so there you have it, you know, and, and that’s, uh, I think one of the things the Saudis very, uh, rightly put their finger on was, you know, everybody’s watching these EIA numbers and they have tried to move there a imports away from the u s or their exports away for the u s towards Asia.
Speaker 3: (24:46)
Uh, hoping to have a, an impact on, uh, impact on the numbers and they probably have to a certain degree. Um, Jim, I think we need to talk about these Venezuelan sanctions or lack thereof. Yes, go ahead. You go first. Well, I think that that’s something out there, but uh, for now, um, we’re not putting any serious sanctions at least on, on the oil, uh, part of Venezuela, which I think is pretty, pretty smart. Uh, we import 700,000 barrels a day from the, from the vents and, uh, you know, that would cause some unbelievable dislocation, uh, along the, amongst the Gulf coast refiners. If we were to, um, put a embargo, uh, through, through the sanction, you know, an effect of bar embargo, uh, through, through the, through sanctions on a us on Venezuela and imports a and w it would hurt the Venezuelan people as well.
Speaker 3: (25:54)
I mean, it doesn’t mean that’s not going to happen, but I think that, uh, for now that’s, that’s probably, uh, you know, that’s probably a good move. Uh, but got to keep, you know, we have to keep watching that. A heavy crude. Yeah. It’s all heavy crude. Can we make that up in Canada or do we, as a matter of fact, refiners are beginning to work with this in the, uh, w with this as a potential, um, possibility refiners are already switching to a Canadian, some Canadian heavies and trying to, um, work around a Venezuelan supply. So maybe in July was down to 500 rather than 700 or five 50. Even if 500, though, that’s, that’s a big number, big number. What I’m thinking
Speaker 1: (26:44)
about it as if, um, you start put push and crude through, I mean, a heavy crude, more heavy crude to Cushing. I wonder if even even the stuff that’s there can’t be delivered to the, to the futures contract with that. I’m just thinking out loud, but um, yeah, it’s, we put some, uh, I’m not, I’m not sure that who knows what this administration will do, but it’s almost like we’d be shooting ourselves in the foot
Speaker 3: (27:11)
to do this. Yeah, definitely the gasoline prices would spike possibly. Uh, and that’s from a political standpoint, that’s never a good thing. Right. I can’t imagine that this would be all that popular amongst the American consumers. So a, it looks like that’s going to be a, uh, yeah. Obviously it’s a main thing to watch and um,
Speaker 1: (27:36)
and I don’t know how much did Venezuelans are paying a, their, their debt service to China. So they, I mean they, presumably China would get, take the oil. It’s obviously not efficient way of trading, but there, there would be a market for the Venezuelan or rearrange all the trading routes, I guess. And that makes our friends stay up late and get ornery.
Speaker 3: (28:01)
Yeah. And I think, you know, as you know, gym, it means dislocation. Dislocation, yeah. Okay. Should usually means a, at least from a spread standpoint, um, you, you usually start seeing the backwardation dislocation generally means backwardation. Uh, you know, we’ll, we’ll, we’ll, we’ll see. But for now, um, you know, there isn’t, uh, you know, it doesn’t look like they’re going to impose a serious sanctions on the oil sector, but that’s all
Speaker 1: (28:33)
for now, for now. Right. Um, real quickly, I just want to mention that the world of options on this rally. We’ve actually, uh, applied vile, moved up a smidge too, you know, from 28 to 30, not quite 30, just under 30. And um, it’s a little unusual because we tend to see the valves go down, um, on, um, on rallies, but, but the market had been quiet, relatively quiet. It was chopping and, and so, um, that’s, it’s really not much of a move, but, um, the, the $60 calls still seem to be the ones with the most open interest. D 60. Uh, and that thing’s been around a long time. That’s the most open interest. 62,000 to 40, um, set 50 calls now up to 42, seven 31, though that’s a, that’s a good number. Uh, could cause problems if we’re there around exploration, um, uh, in, in the middle of the month of this month.
Speaker 1: (29:35)
Um, and on the puts, the puts are spread out. I mean that you’ve got a, you know, five and 50 puts in September, around 31 34,000. Uh, these 50 put these 45, put these 40 foot. So those are all hedges again, that DSA team, I’m sorry. Uh, the, these 17 I’m talking about, uh, uh, they’ve been, they’ve been around a long time. That’s a key option for hedgers to play. And, um, I guess there, there’s still people out there looking for $60 by the end of this year, uh, with, with those 62,000 to 40, uh, number one open interest contract. What do you think about the, the chance of that thing going into money? So it expires in the middle of November, which, uh, which was, uh, uh, this’ll be the sixth decent December 60 call expiring. Yeah, that’s gonna be tough. Right.
Speaker 3: (30:32)
That’s going to be tough. I mean, it’s sick. It could happen. You can’t rule anything out in the oil markets. I think Jim is, we have learned.
Speaker 1: (30:43)
Right? That’s right. Eddie is possible. But, um, I dunno. I the, the interesting thing to me is, um, last month the market was headed to 40 and below, right? A lot of hand ringing. Yeah. All the, I remember all the stories we read about peak oil, peak oil demand, and now we’re just, what you just laid out was a potentially extended bullish move from here, you know, use it. Maybe not so much.
Speaker 3: (31:16)
Oh, crazy bullish, but you don’t want to sell it here. So I don’t think so, except unless you sell it for a pull back. Like today we’re seeing a pullback. I think there was some, you know, certainly some concern over the sanctions. Um, but yeah, unless you want to sell it for a pullback on, I don’t think it’s the greatest, you know, the greatest trade. Um, you know, in terms of a price. Yeah. Could we get up to, can we get it on right now? We’re, we’re thinking of 52 53 on a, on a move
Speaker 1: (31:50)
for Wti or Wti. Right? Yeah. So I mean, your, your range that you are working with for a long time. Uh, I think most of this year, if I recall, has been been 45 55.
Speaker 3: (32:01)
Right. And that’s basically been, you know, yeah, it’s been in and out every now and then. But you know, I think that range is, is still pretty good. Uh, you know, fourth we’re going to have to keep drawing. Um, and the other thing is the hedge activity in the back, you know, we’ll see. We’ll see what that looks like, uh, as, as prices get higher. So I uh, yeah, right now I think 52 53 is the WP system. Vti is probably right. 54 55 brand, something like that. And maybe a little higher, but right. Jim? 45 55. Yeah, it’s still there. It’s still good.
Speaker 1: (32:40)
I’ll tell you what, if you played that range all year long, you’ve, you’ve done pretty well, you’ve done pretty well. And then one day he woke up. Right, right. Yeah. That’s the game you play though, right? So I think that’s, so we’re gonna work with that 45 55 range. You think there’s another navy cutting out a couple of dollars in this move before we start getting into that, you know, you were coming out of the summer, maybe, maybe demand gives us a little break.
Speaker 3: (33:11)
Right. And we were friends who are going into maintenances, you know, so demand for crude isn’t going to be quite as strong. So, uh, yeah, I, it’s hard to really get the fundamentals have improved. It definitely have improved. And it’s just a question of then this is, it assists, you know, we’ve talked about all year quarter fundamental should approve and they, they have,
Speaker 1: (33:37)
hey did they, they were delayed a little bit. It seems
Speaker 3: (33:39)
the blade right? Yeah. I mean there was a lot of hand wringing along the way, but they have approved it, but inventories are still too high. They need to draw and uh, you know, that that’s continues to be a big obstacle in getting to that 60 to that $60 well, very good. Anything else Andy you want to add? We’re good. No, I think we’re good. I do. Wanna I do want to add that if anyone is interested in our monthly report, they cannot get a hold of us. They can get a hall wanting. We send an email to me, uh, a firstname.lastname@example.org, and we’ll be happy to send you a, uh, our latest monthly. Excellent. Andy, let’s end it there and we’ll see you next the next month. Okay. Thank you very much. All right, thanks Jim.