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, oil market experts Andrew Lebow and Jim Colburn discuss key fundamental forces driving oil prices in both the futures and options markets.
About Your Hosts
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.
This is Jim Colburn of commodity research group. I’m with Andy Lebow also of commodity research group and we’re here with another edition of energy markets to find out more about us. Check out our website, commodity research group.com where we post our blog and our podcast and other information. We would like to thank our friends at EKT interactive oil and gas training for hosting this podcast. You can check out their podcast and learning firstname.lastname@example.org this podcast should be construed as market commentary, merely observing economic, political and market conditions and is not intended to refer or endorse any particular trading systems, strategy or recommendation. We are not responsible for trading decisions taken by anyone, especially those not intended to listen. Information is not guaranteed to be accurate. This is not an offer to buy or sell any derivative. Today is September 11th. We were in a late afternoon and, uh, we had a nice rally today. Andy, why don’t we start off for with, uh, what happened today and maybe that’ll lead us right into the, uh, chat about the Iranian
sanctions that we want to start off with. Yeah, we had a big day to day off, uh, appall almost $2 WTI closing around. Um, let’s see. WTI closed closing number, well, close to 60 light fortyish now moving in on, uh, moving in on $70. Uh, the headlights today, we’re a, that the market, the civically that it’s been the headlines for months actually is that the market is concerned about the, uh, Iranian sanctions. And you know, I know we’ve been talking about it, what month in and month out, but we are getting closer. Uh, November 4th is the day that, uh, the sanctions go into effect. And, uh, I think the market is finally coming to grips with the fact that a, yeah, we are, we are going to lose, uh, some significant supply out of the, uh, out of the Iranians. And, uh, you know, I think we’ve been talking about doing these balances over and over and over again. And um, you know, it looks like fourth, it looks like fourth quarter, which is beginning in just a few weeks we’re going to see a, a pretty, pretty healthy, a healthy stock drunk. So,
um, what, what do you think the market has, um, built into it for a radian exports? I mean, we, we’ve been averaging around 2.6 million a day.
Yeah. If you take the year average, it’s 2.6 of, of both crude and say it’s, uh, some months, you know, lately in June and July was way higher than that as a buyer scrambled to lift additional barrels. Uh, and as we head into a August, it’s already beginning to decline. It’s probably, I don’t know, two, one, two, two and September it’s going to go, it’s going to go lower. I still think the markets around around a million barrels a day gym, give or take a couple of hundred thousand from that, a decline, decline that, that’s a, that’s a decline. Um, and as we’ve been saying, it could be more than that. It could be less than that. But you know, I think the big developments, uh, China has said that, uh, they’re gonna, they’re gonna keep taking barrels from Iran. It’s part of their, their global strategic strategy. Uh, they lifted averaging like let’s say 700,000 barrels a day.
And I think it’s going to come in right around there. So you know, the Trump administration has talked about going to zero. It’s not going to go to zero, uh, because of the Chinese. And uh, what the Iranians have worked out with them is a, that basically going to go in to pay both the insurance and freight to get around the secondary sanctions on a insurance and freight. And India is working on the same deal in the, is their second largest, second largest buyer and a the Indians who averaged a around 600 a day, uh, are also working with, with the Uranian saw on, uh, on, in buying, it’s CIF with insurance and freight. So a, they bought, so between the two that there’s already 1.27, five, I think India is not going to be lifting all 600. They’re looking elsewhere, but they’re, they’re not going to go to zero, I don’t think.
And so, so you’re, you said your number is, uh, around the 1 million off and that’s kind of,
yeah, a million, million, million, million. Two. So something like that, you know, that that’s still is going to depend on where India comes out. It looks like South Korea and Japan, both major, both major clients, you know, the, they’re, they’re probably gonna go to zero, um, and are beginning to lift barrels from, from the u s unclear on the UAE and the EU is still negotiating, but that may go to zero also from the, from the EU.
So, so do you see a situation where, you know, China’s getting pressure from Trump with terrorists and in other areas and they just say, look,
we’re going to buy
as much Romanian oils. We can because you keep pushing us with these tariffs. I mean, is that, is that you think that’s a possibility that China comes out
and ends up being a huge buyer? Like they buy more? It’s, I, you know, they said they aren’t going to be buying much more, but certainly it, certainly it’s possible. And, uh, you know, it also depends on the price and how much Iran is gone is going to discount. So, yeah, I mean that, that’s the scenario where, where, um, you know, less, less, less ferals are affected from, uh, from Iran. And we’ll again, we’ll see where that comes out, but I don’t think much is going to come from the EU and that Turkey is going to still buy from the still going to buy from uranians. You know, the, there are also major, not a major, but you know, the, they bought the average about 180,000 a day and I think it’s going to come in right around right around there.
Um, so now we have, let’s say we do have a million barrels and rain crude off by, um, November. Um, what’s, what’s the OPEC response?
Four, I should say, the Saudi response or the old peck peck response. Uh, they can make up, uh, a lot of that. We’ve already said we’re, we’ve already seen the UAE and Kuwait go up on, uh, you know, on their production by about, let’s say 200 between the two of them. And then Saudis gone up by five or six, let’s say. Let’s say they were a 10. You know, they’re probably like 10, four, five right now. Um, so you know, there’s this six 50 from, uh, those to Libya has gone up from their decline. Nigeria as well has gone up a little bit as has Iraq, but you still have Venezuela. Venezuela has gone down. Um, so net, you know, we see OPEC production probably three down by three or 400,000 barrels a day. Uh, maybe a little more from a where it was in, uh, in July and, and in, uh, where it was, let’s say in August, I’m sorry.
And um, which we’ve just mentioned a possible, um, terrorist with having, not possible they’re happening with China, but the, um, the trade wars, uh, I want to talk about world demand and then there’s, there’s been a little bit, uh, talk that, uh, will demand and we’ll be flagging a one because of the trade wars. And then number two, because the emerging emerging markets are taking a, a major pummeling, at least there, there’s stock markets. And I was just wondering if you see, you know, what’s your outlook for demand? Uh, you know, rest of this year, next year. And, um, are you, you know, you’re starting to see any decline in demand. No
simple. You like to see, Oh man, demand is falling apart, but you know, really isn’t yet know. It doesn’t mean it can’t, but you know, it, it isn’t. In fact, the IEA earlier this month actually increased their call for a demand for both this year and then next year marginally. But you know, the point is they didn’t decrease it, although they give a warning, you know, that listen to it. It could definitely have an effect. Of course it could on, um, diesel demand, certainly Chet fueled demands, some petrochem know on, on all demand and could, you know, but the question of course is, is, uh, you know, how much, if any, but so far the evidence is no Asian demand is still still really strong. Now emerging market demand is harder to gauge then it probably is being, you know, probably as being shaved, but you know, where, uh, you know, we’re not seeing it and you know, they’re in La, they’re in, as we talk about the fourth quarter as demand goes up, you know, the OPEC production is not going to be OPEC and non OPEC production together. Even with a Russian increase is not going to be enough to meet the, uh, to meet the higher demand. Then we’re going to start seeing, I think, you know, a pretty good stock drawer in the fourth quarter, which is what, you know, which is what the market being. So the market’s been in a trading range, but now in spine large being supported, you know, we’re not seeing the, these big, any sell off has been, has been supportive.
Yeah. I usually when I come into these podcasts, I say we had a lot of lot of stuff going on over the last month and um, you know, I’m looking back and we’re beginning to see a, uh, more and more well defined a trading range from, I dunno what’s Wti of Ux 64 to 71
wt I did get up over earlier in the summer, it got up over 70, you know, 75 I think. So let now know what kind of chart right now was 75, 27 but lately it’s been just in this, no 72 63 72 type range, which is pretty much what we had been looking for. And I think what the market has kind of grown, grown pretty comfortable with, you know, [inaudible] 75 that rally Jim, I think that, you know, that’s really what the market is all about because that rally took place when the market was completely freaking out about Libya because living exports you remember went to like, I dunno, zero earlier this summer and you know, you look at these balances and we really need these Libyan barrels. I mean we need Libya, Nigeria, we need everybody to come through. Uh, in order to prevent a real, you know, real significant stock draw. I mean, the market could live with a few hundred thousand barrels a day of a stock truck, but you know, if Libya goes down again, you know, the Saudis aren’t going to be able to replace all of that, you know, or if Nigeria goes down, I mean there’s no spare car. There’s really, there’s not that much spare capacity. You don’t have confidence that the Saudis will start pumping out willy nilly.
Well, based on past performances, as we’ve said, they liked to sell what they, they say is demand for their crude. And you know, part of that is what price they charge for the, for their crude. Now I’m sure if Libya went down the, yeah, the Saudis weren’t. Yeah, they would, they would increase production. Right. But you know, there are 10, five, now they’re, they’re sustainable is maybe 12 maybe. You know, I don’t know how fast they can get up to 12, you know, if it’s, if it’s that, you know, who knows, you really don’t want to find out in a world of hurt and the price would be probably soaring at that point. The price would be, yeah, the price would be in three figures. I think
I mentioned the trading range and you know, and in my experiences an options guy, once people traders get to see this trading range, uh, you know, painted out on the charts, then they want to be, it makes you say, Whoa, I can, I can sell these calls and these puts and because he’s look at this chart and then usually it wouldn’t, once it’s, you know, traded out that clear looking range, it’s, it’s getting to the point where it’s going to bust in one direction or the other. So I just, I just want to take this point and mentioned that. And also the, you know, the EIA report came out today, um, the monthly, um, short term energy outlook in, in the, uh, uh, highlighted some Brent calls, which is kind of unusual. Yeah. So they were talking about how, how active the ds 80 calls where, uh, over the last few months.
And I looked at the open interest and there’s 46,000, seven 35 and that’s pretty good number that it’s the second highest open interest in Brent. Um, the number one is the decent 100 call at 49,004 12. So, so these have been trading all year long as people were wait, you know, uh, uh, trying to play a potentially tight fourth quarter, which use you say is in the offing and it’s, it, it, it seems to be to pass in, in the Wti, it’s a little different. Um, the DCE 50 put is the, is the number one openness was 39,000 in the DCD call, um, is almost 38,000. So there’s a whole bunch of December calls and Wti that, uh, have a, have significant open interest as well. So I, it, it looks to me like, you know, this will be the, the most anticipated market move of all time, you know, we’ve been talking about for, right. So in that, that bothers me. So can, can you make a case for like a breaking out of the downside of this range?
I think, yeah. I think you can make a case. Let’s say these demand numbers do start coming and soft, uh, or there’s a Ma, you know, a further deterioration on the, on the macro. Yeah. I, I think that that’s certainly one thing that can happen. And let’s say Iran is able to export more than what we think. Uh, let’s say Libya continues to produce around a million barrels a day. Nigeria increases production, we start getting more bold, more OPEC and non OPEC production. Can Canada, Brazil, uh, are slated to have a production increases. Yeah. I mean, maybe it may be the fourth quarter is of the stock draw. You know, maybe it’s a stock built, you know, that’ll, that’ll certainly mess up blind generators
and that, but that’s not, that’s not yours. That’s not what you’re looking for. You, you’re saying it’s, I mean, we’ve done this a long time. Anything is possible, but are you saying anything’s possible? Um,
I think Jim, that, you know, at least for Wti, as we head into turnarounds now, we are going to start seeing stocks, cruise stocks build. And one thing that was really bearish, um, the we talked about before the podcast is the short term energy outlook that came out today. And it, it, it’s, it’s shown this over the last few months. The market pays no attention whatsoever to it, but you know, it, it’s saying that crude stocks are going to build like 75 million over the next six or seven months, seven or eight months. And the total us stocks are going to build a build 100 million. So, you know, at least the quarter of the IAA, we’re going to have a pretty big, uh, stock build and we’re going to get like total inventories of over 1.3 billion barrels, which it, which is, you know, that, that’s, that’s a lot of inventory. Now, most people, including myself through tapeless summers with a big grain of salt, but Jim, we attended that.
Remember that conference we went to and they talked about their model and their model was pretty good. I mean I was really, I was really impressed that they had, you know, they had a lot of the, their input variables I thought were really good and they tested a lot. So you know, I really, I really think the EIA doesn’t get respect for their, for their, uh, short term. Their monthly report in the OPEC gets a lot of press in the IEE. Iea with Eia just Kinda, it’s out. Sometimes it, it, it makes a splash, but most of the time it just, everybody’s waiting for, I guess the IEA is sort of the uh, is the, is the main one, right? It’s the main one. Yeah, the Bible. The other thing, yes. It’s really interesting in that short term energy I’ll look was that they are reduced their expectations of us crude production for next year.
I mean 200 a day. That’s, that’s, that’s pretty big. I mean, I think they mentioned a severe constraints in the pipeline. Takeaway capacity is one of the reasons for that. I mean, is that right? Yeah. And in fact, over the last month, both, um, I know Schlumberger, I think Halliburton as well was saying that, that, you know, they were, they weren’t seeing the activity in the Permian was, was much less than than what they had expected. So I can’t say I’m surprised that it was reduced. Look at these, look at these differentials. Yeah. What was the, uh, I don’t trade this, let me just read this. The Midland minus what they call it, math and Magellan East Austin got down to minus $24 on September 4th. That’s a pretty hefty spread. That’s, yeah. And it’s probably going to get worse. You know, the, that could, that could go out to any number because there’s no way to get it out.
And they in the pipelines come online. Is it any, any of them this year or is it, are they all coming? I think some of the fourth, but nothing, nothing significant until like third quarter next year. You know, I think by fourth quarter things will, will, you know, things delete things will be leaving out a little bit, but you know, it still looks like this is going to be a big deficit of, of pipeline capacity to production for, we’re talking months now. Right. And it’s put pressure on the Brenty I spread and uh, and um, I guess that a, an incentive to export oil from the Gulf, but you can’t get as as much as you want, but still it should, it should stimulate works. Right. And sports are definitely, they were, they were down in, uh, they were down a lot in August. They certainly will increase a lot. And in, in September, uh, let’s see, I actually have these numbers, uh, exports in July or 2.1 million barrels a day in August, they down to 1.6 million barrels a day. So they’ll probably move back up, you know, into the closer to two
man, look to me like everybody took August off. I don’t know, I just, just the trading volume seem to just disappear for a while. And, uh, you know, I, I know I was looking at, uh, did John Kemp from Reuters does an excellent a weekly report on the fund activity and he’s got a beautiful chart chart book in there, suggests everyone up, just Google it and you find it. But, um, you know, he was saying for months now I guess because of this trading range as well, funds had been liquidating, uh, length. And then about the last two weeks, uh, they’ve been adding length, but we’re still not even close to the, you know, the, the net lines from, you know, a few months ago. And, you know, today’s action was probably a little fund, uh, some serious fun buying and they’ve been more to go. I mean, they could, they could really get this thing maybe busting through that range and the upside.
Yeah, I think it’s possible. You know, the, the Wti Brent is really where they, they’ve added, uh, if they had it almost a hundred thousand in length on the, on the brand market in the last two weeks, well, nine 92,000. And to be precise. But nevertheless, that’s a huge, that’s huge. Map of brand is still only 11 to one long to short. WTI is 15 to one. You know, those have been the, I spent over 20 to one. I mean one point it’s 27 to one. I’m just looking at my numbers here wants the short, which was way over, which is way over done. But I think you’re right. Righteous. I think. I think we’re seeing, you know, seeing some spec money coming in and yeah, if they keep coming, sure. Maybe we do. Maybe we do break out, you know, get, get to the upper end of the range or, or even higher.
So, um, the weekly numbers, the Eia puts out the, uh, weekly, um, uh, stock numbers for crude oil. You know, we look at crude oil, gasoline at this let’s, and um, and they, they show the chart of the stock levels compared to the five year average. And then if you look at these three, um, crew, I was Kinda in the middle. This will be the of the high and low, the five year, high and low. Um, dislet seem to be on the low end and gasoline’s on, on the high end. You just kind of take each three and you know, you mentioned, uh, you know, the EIA looking for stocks to build a lot. Can you just kind of pull
apart, you know, those, those three areas and, you know, tell us what you think going forward. It’s going to happen. Well, gasoline has been,
we’re not seeing any big growth and gasoline demand at all. Export demand has been, has been okay. Inventories. I was riding in our monthly, actually that I fucked gasoline was improving a little bit because we’re, we’ve drawn some stocks here in the last couple of months and I think we’re going to draw again in September. Of course, this is big storm. Uh, Florence is about to hit the Carolinas and that, that we’ll see. We’ll see what happens with it, with any, you know, ports or any energy, uh, infrastructure. The colonial pipeline is best, uh, goes through the Carolinas for it’s west. Oh, well, you know, with that could, that could change things, but let’s say nothing’s changed. Uh, um, gasoline, I think it’s going to get a little bit better and a little bit better and balance. Uh, but still nothing, nothing really to write home about. Uh, the big demand growth is not us demand, you know, it’s going to be, it’s going to be a export demand in terms of, you know, refineries supply where we’re fine.
You know, we, we flipped it, speaking of expert and they do, we just have one export market and Mexico, I love Mexico, so take it like all our gasoline and one at one of the goals of, uh, the new Mexican President Obrador, uh, is to increase their refinery capacity and increase their production. Now he says by the end of his term, he wants a Mexican production will be 2.6 million barrels a day. It’s currently like one, eight, one nine, something like that. So He’s, he’s on it actually, you know, it’s actually saying the exact thinks he should be saying right now whether they get their lot. That’s why there’s also like this, these, the shale goes right across the border and it’s been produced in the u s and not in Mexico. So there’s, you know, there’s just, I think a lot of acreage that they can get after if they decide to get after it. Right. Well, plus all their a offshore. Right, right, right. But that’s, you know, a lot of their fields have been, you know, I’m pretty steep decline, sleep Cantarell feel, which is their, you know, their major production. Um, you know, it was from going down seemingly every single year.
Dot. For decades, you know, for like 10 years. But yeah, there, there are clearly a key, a key market for us as, uh, you know, as, as this Latin America gasoline we’ve been so, so just to finish up on gas really does look that interesting. Jim saying this for months and we can add some spikes. You know, there’ve been, it has, you know, we’ve seen some backwardation and in New York right now, pump prices are, you know, on, on the rise, which is not going to help too much, but you know, gas, it’s hard to get all that excited. Now one thing that, you know, the, the cracks of beginning to rally the gym, I think both of us has learned, have learned when you headed, when it’s September and October, what we say this right, what don’t you do? Cracks. You don’t sell cracks. There’s this low, you know, unless you do it so serious hedging and even then, even then you probably don’t want to do it right?
You just don’t want to, you don’t want to mess with it. And uh, there’s another storm behind this one. So a butt cracks, you know, and they’ve written the rallying the diesel cracks gone crazy. Diesel. I was, I’ve been turning sort of neutral on, on this list. It’s rebuilt the last few weeks. I think it’s going to be steady in, in September and uh, maybe slight decline. But this little went from looking like all my God, this is so bullish to, it’s bullish, but it’s not, it’s not, you know, completely out of control as it was, you know, earlier in the year. And, uh, you know, we’ll head into winter with lower stocks and we probably should have and then we’ll see what the weather is. And all next year, Jim, we’re going to be talking about this, uh, the Imo, the new specs for a shipping. And some of the stories I read, I just cannot believe that. I think people, I think some analysts will completely lost their minds. You know, in fact, I read one report where some analysts was seriously saying that he thought crude could go to $100 because of the change and the diesel Spec, uh, in this ship expect that’s crazy. That’s not happening.
Yeah. Kind of reminds you of a turn of the millennium. When we was at y two k everybody was freaking out about, uh, oh yeah. What was gonna Happen? And, uh, I remember many of our clients, we’re not allowed to sell call op or so options in general. And the WTI option involves got above the heating Laval, which, and we were going sort of into the winter. It’s not that it wasn’t supposed to happen when we put on some nice place for people. Um, because after two, after the turn of the,
you know, new years went by and nothing happens and the deputy Ivo came right back in and there was a cold blast. So you, you know, it was serendipitous really fooled rather than, and the heating oil market went wild, so you long that fall and your short to crude vowed it just, uh, it was a beautiful thing. That was a great ago. That trade, that was a long time ago. But that was great. That was great trait. Yeah. So, yeah, I mean, when something is a, you know, it’s, it’s, it’s another thing where the market will adjust for needs for the change to this Spec. You know, I don’t, I don’t think that the shipping, the change in shipping Spec is going to move crew to $100. I just thought, I don’t, I don’t see it right now.
Right. Well, we’ll see. You know, we, we certainly are seeing the call buying as we mentioned earlier in this podcast that seems to be, uh, trying to take advantage of the tightness in the fourth quarter. There’s, they’re, they’re in the top 20, uh, strikes in Wti, I think three of them are $100 calls, one, one in December, and then there’s some next year. I think that the things the June, it’s up there as well. So, um, but we haven’t really have heard people taking the positions for that issue that you just talked about. So we’ll keep an eye on it. They’ll say, we’ll see what the market, you know,
we’ll be talking about it now they’re talking about, we’ll be talking about, and then one thing to look at, you know, yeah. The fourth quarter looks, you know, it looks like we’ll see a nice stock draw. We think on paper it looks like, but first quarter, Dustin, you know, first quarter looks like stocks could start rebuilding again, depending on, you know, where the, where the Iranian exports are, OPEC production, et Cetera, et cetera. But you know, the call on OPEC crude is actually around six or 700 less than what it, where, you know, we’re, we’re putting OPEC production in the fourth quarter. So, you know, let’s look at, let’s all right. Yeah. Like you said, Jim, this is the most anticipated stock draw of all times. Maybe, maybe, but then the, let’s, let’s not lose sight of the fact that the first quarter does it look so great and I’m still plenty of moving parts, but it isn’t like, you know, we’re going to keep, we’re going to keep drawing stocks, you know, on end for like months and months and months, you know? Yeah. We may have a stock from November, December, January, depending on what the weather is, February. And then, you know, then we’ll start seeing second half, five in March, and now you could see an April, you know, you could start seeing stocks bill feel pretty good.
Now we have OPEC meeting and I think it’s 3rd of December. So the next one
that, yeah, the neck. Yeah. We have an OPEC meeting in December. Um, I’m a low, it’s too low. It’s way, it’s way too early. I don’t see the Saudi minister in the Iranian ministers as roommates. Right.
Different way. What going forward, what are the things you’re going to be
laser focused on is going to be a Romanian
export numbers. That’s the, that’s the main, you know, that’s the big change in the fundamentals and where the Saudis come out. Uh, the Russians really don’t, you know, they, they can’t increase production, all that, you know, all that much. And, and US production. And as you mentioned earlier, Jim, you know, we’ll see if this trade war has any effect on, uh, effect on demand and where the, you know, where the Geo politics come in, how, how Iran reacts, you know, this, there’s so many things to watch our moving parts. It’s amazing. The market has really been in this tradie rage, but,
so we, so our implied volatilities are not 24.5, which is, you know, writing from earlier in last August. Yeah, it’s up a little bit, but it’s not, you know, you figure maybe he’s just looking at 30 to 33 is a, the longterm average. So it’s really, you know, it’s just guys, this trading range mentalities, the 20 day historical is 19 one. That’s, that doesn’t count today’s big day. So that’s, that’s, that moves all over the place. And, um, and I really look at that too closely, but, um, you know, 24 or five is reasonable. We’re still on arrange, you know, and if it breaks out on the upside, this market just doesn’t get too crazy from an implied volatility standpoint. So that’s probably a reasonable number right there. And that works. So let’s, let’s wrap this up and he would, um, let’s talk about prices for crude oil. You know, we do this for the say a month forward. Um, what do you think?
well, it, it, uh, unfortunately it’s really, it’s really hard to see the market breaking out, you know, really convincingly right now. You know, Ken, Ken Wti get back to $75. Shit. Yeah, probably. I think it could. Um, but Jimmy, but you’ve definitely given me input, um, pause in that. You’re right. You know, we’re all talking about the same thing, right? Maybe, maybe. Yeah, yeah, yeah. Or it just grinds higher. That’s the brines higher. Maybe, you know, I’m sure there’ll be, you know, there’ll be some hand ringing type sell offs, you know, depending on where the mat, you know, depending on some of the macro, the macro stuff like we saw, you know, and in July and August when we had that big right excel off. Yeah. Maybe you’d be a little reluctant to sell this market aggressively going in as you get closer to the November in, in the chats are ran and you know, in president Trump wants to get it down to zero. It’s kind of hard to be short to that. Yeah. Price. And you don’t know what, you know, if there’s any, if there’s any action by the Iranians, you know, what they’re, what they’re going to do. They did, they did close to shipping lanes are earlier in early in the summer. And, um, you know, I this,
Unlikely to z very low percentage that they’re going to try to close the Straits of Hormuz. But you know, it only takes a little bit. Yeah. Just a whiff of that market. Just completely, you know, completely freaks out. And we saw the Iranians had the, um, you know, the, there was some missile sent into a, into Saudi Arabia last week. Right. So not by Ron but by the, the um, you know, by the rappels and in Yemen. Right. Who are kind of backed by the back by the back, by the Ron. So you know, you always have the Shiite Sunni conflict to deal with. So. So you think, uh, probably not above 75.
Go on Fred. Fred, say it a month from now and then not tough to, to see it above 75. And then what about below and is that again? I, I think, um, 63 64 on the, on the downside would be still good still that I think it still should be. Yeah, still should be good. All right. Um, yeah, it’s still should be good.
Okay. Anything you want to add to this month’s podcast before? Yes, yes. There actually is something I’d like to add. Go for it. That is a, um, a little plug for commodity research group. Uh, you can find us, as Jim mentioned on, uh, the, you can find email@example.com. You can reach firstname.lastname@example.org. A lot of the stuff that we, uh, put out is on our monthly report, which is a for sale by subscription. So, um, you know, we’d love to sell more. So if you’re interested in law and reading about what we’ve, what we’ve been writing, not only about energy, but Ed Mirror, our partner does an amazing job on some of the other funds, some of the other commodities, and typically particularly metal center and financials. Very good. We’ll see. We’ll see everyone next month.