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 to talk about energy markets.
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Today is a March 13.
Good morning Andy Lebow.
Good morning, Jim Colburn.
I just want to point out Andy that as old time observers of these markets, we sometimes tend to say it wasn’t like, you know, today’s action. It was much worse than in the old days, right? So, but it’s not, this is, this is historic stuff we’re going through in oil markets and why don’t you pick that up and run with it?
What do you think?
I think you’re right, Jim. We’ve certainly been through, been through a lot over our, a long and very checkered career in the, uh, in the futures markets and particularly the crude oil market. Uh, this is definitely one for one for the books. You know, I was going back looking at previous lows over over history and having lived through every one of them, Jim, like, Oh my goodness, Oh my goodness. And um, you know, and, and this one was, uh, this one was definitely been, uh, Oh my goodness. Oh my goodness. So my goodness, because we, as you said, we’ve never, we’ve never had a demand shock coupled with a supply shock. Uh, you know, it has definitely without a doubt, sent the market just reeling from it. It’s amazing. We were, w WTI was trading in the 60s in January, and we’re on it. We’re under 30. And, uh, in early March, uh, I think it’s 32, 33 33 now. So, um, you know, we, we, we’ve really never, we’ve never had this, um, you know, the, I think the market and, and traders and every, every, all participants are trying to figure it out.
Yeah. I just, uh, just, uh, and I know we’re going to get into this a little more later, but I just want to let you know, um, we saw yesterday, um, somebody by some June $6 50 cent puts, Ooh, just, you know, it’s a small size, but, um, I’m just saying that it’s, the panic is showing up. Yeah, definitely. Well, that would be a new all time low. Six 75 or six 50. I think the all time low from not mistaken is nine 75. So we’ve, you know, we’ve been on through $10. Could we get there? I don’t know about that, but, you know, scarily it’s, it’s not completely out of the realm of possibility. So why don’t, why don’t we start with, um, the OPEC meeting and, and what’s going on there? And then, um, maybe get back into the, uh, EIA [inaudible], uh, demand, uh, estimate revisions and, um, but let’s, let’s start with OPEC. W why don’t you just recap the meeting and yeah, that was a, you know, that that was quite a meeting. And, uh, I think one, obviously unforeseen by the, by the market, given the, the gap down action, you know, the big, the big losses that it, that it’s sustained overnight. And, um, you know, we, we all of us had thought, all right, we’ll pick, spin a, cut a million barrels a day and, uh, you know, Russia may or may not chip in, but that, that didn’t happen. OPEC wasn’t the OPEC, I. E. the Saudis Kuwaiti Zen and UAE, uh, weren’t willing to, uh, caught without, without a Russian cutback. In fact, they may quite a gamble telling the Russians that if they didn’t call it, then, you know, they weren’t going to cut either. But not only did they not cut, you know, not only are they not cutting, but after the meeting it became very clear that they were going to increase for the auction.
So the market went into a meeting thinking, okay, we’re going to get some kind of caught between a million and a million and a half. And it came out of the meeting where we’re actually not only we’re going to get an increase, you know, we were going to get an increase of upwards of 2 million barrels a day, may be more. And, uh, there was obviously a lot of, uh, a lot of posturing at that meeting. I don’t think the Russians played it very well. I don’t think the Russian slaughter would get, you know, the Russians were saying, we’re okay at 40, but I think the Saudis came back and said, all right, well, how are you at 30? Or how, how you, right. And hence we have, uh, you know, we have a full blown full-scale price war on our hands. And, uh, you know, it’s, it’s gotten ugly and I think it could get, you know, even uglier.
So we take Saudi Arabia, they’re, they’re talking about expanding their capacity to what, around 13 million. Right. And they’re, they’re saying they’re going to increase production to 12, uh, to 12.3 million barrels a day in April. We’ll see if that happens. You know, I think the market is there currently, you know, the, their February numbers were around nine, seven so, you know, they’re talking about 12 to, so that’s 2.5. I think. You know, realistically it’s going to be in the Eleven’s still, you know, that, that’s, that’s a big increase. And the UAE is talking about increasing a million barrels a day over their current number of, around, you know, two, nine, 3.0 million barrels a day. I’m not sure they have that, um, you know, never been up or out for ever. So we’ll see if they, if they’re able to come, you know, whether, where they come, where they come in.
Right. So, um, yep, go ahead. Sorry. And of course, you know, there’s still big wild cards cause Libya Libyan production is down a million barrels a day because of the, uh, because of, um, you know, the political battle there. You know, if they, if they came on the, then we’ve got to add, you know, we had a million barrels a day on, on top of that. Right. So that’s again, you know, it’s frightening. So we’ve seem to have, it’s only been a couple of days. We seem to have paused around this $30 area. Is that, do you think that, what is that? Is that like a sort of a storage demand? People buying front month crude storing it? I mean, the curve is definitely, we’ve, we’ve, we’ve gone a contango enough to make it profitable to store. Is that Oh yeah, yeah, yeah. It probably, we probably is some demand. Uh, you know, usually when the prices are, are get hit this, this hard.
We usually see China come in and, uh, you know, become very aggressive buyers. You know, I’ve not heard that they’re aggressive buyers that their issue, and I think this is something we need to discuss Jim. The big issue is where are we going to put all this? You know, storage is going to become really, you know, really an issue and may June brand which was trading, you know, may over June. So you know, a few weeks ago it’s at some point was down. You know, right now I think it’s minus one 70 Carey, you know contango that’s huge. That’s a huge number. Yeah. June DCE brand is 90 cents, 90 cents a month. So you know that, that, that all works for storage place. Yeah. And at some point as that thing spread continues to blow out, it tells you there is no more storage as well. Right. There’s the over stores and you know, you got to get boats, you gotta have to get, you know, I think Eastern hemisphere storage is going to be tough to find. Cause China, you know, they, they were at record crude storage because of the, because of the drop in demand due to the virus. Right now they’re starting out at high storage. Yes. Maybe they’ll put some know, put some in strategic storage, but their commercial storage is, is you know, pretty full up. Well, it’s, uh, it’s interesting.
Um, if you look at these CSO, the, uh, spread spread options that, um, we start to see some of the money, uh, like minus $1, uh, puts trade for may and June. Um, I think like up to 6,000, uh, June’s traded, uh, yesterday. So, um, it looks like you have some people, uh, looking at that, you know, that that scenario of, of, uh, continued, uh, contango and deeper, deeper contango as well. So my point is it’s showing up in, um, people, people are putting money down on that, on that kind of possible outcome.
Right. And, uh, I think, you know, looking at the, looking at the balances, you know, it’s pretty hard to argue against that right now. It’s, it’s just hard to, it’s hard to argue against storage filling up. I mean, in the U S the Western hemisphere, there is storage available, um, that, that there’s no doubt. And if you look at the EIA numbers, you know, last, it was only a few years ago, we are at record crude, crude storage was 535 million barrels. It’s now, you know, it’s now at, uh, four 50. So you know, this at least we’ve recently been this 85 million barrels to go, at least that we get up to that five 35 number, you know, and it’s hard to argue that we won’t get there.
Right. So I guess what I’m saying is for, for the disaster scenario and crude oil to get down to some of those lows, record low prices that you mentioned, you kind of have to see storage fill up. Do you think? I mean, I think so. Yeah, I think so. I mean, or, or we get a demand response, but you know, obviously China’s going to have to come back, uh, and we’ll see how bad demand is going to be in, in Europe and in the, uh, in the U S yeah. I mean, the virus seems to be growing exponentially in Europe now, not, not in China. And, uh, and you know, it’s picking up, it’s picking up outside of China basically and tryna seems to be, you know, they’re getting double digit new infections each day. More people are leaving hospitals and going in I guess. But still it’s, you know, how do you come back from that? Does everybody go back to normal? I don’t. I don’t think so. I don’t think so either. We don’t know. We don’t know. You know, we don’t know. I think what I think the best thing we said in the last podcast is we just, you said that make three or four times, we just don’t know how this thing’s going to play out still.
Right. But what we do know is that if, you know Saudi’s pudding, if Saudi’s going to put million barrels a day onto the market, you know, in April though, the market just can’t hit it. You know, I can’t handle that. Particularly on UAS throat, you know, throwing in extra, you know, whatever they ended up producing and you know, Russia tries to produce more, you know, the market can’t handle that. Right. It just can’t. And so we’ve got a supply shock and then, um, you know, demand is not gonna. It doesn’t matter how low gasoline traded we are. We’re the, I dunno, 85 cents yesterday 80, it was under 90 cents on the nearby. Yeah. Any gasoline really took a big hit relative to the rest of the oil, uh, to other products and, and crude. So what, what was, what was that? So that’s a New York Harbor futures contract we’re looking at.
Right. Right. And the market is, is obviously, you know, that’s, that’s gotta be a complete demand response because the supply, there are cargos coming in, you know, Europe is sending us gasoline cargoes, but they come in every month. I think that was just that the, you know, that’s gotta be a demand response and no one’s driving. Yeah. It happened so quickly, you know, boom. Crack Scott killed the heat, the gas got killed the first two months, got to everything with everything versus thereby gasoline was destroyed. Destroyed. Yeah. Yeah. Well nearby. It was destroyed versus everything else. Yeah. Right. Right. So what does this mean? So some of this, um, OPEC has to be upset with Russia. Russia’s upset, probably the producers are upset watching every time they cut back, the U S fills the void. Um, what was this mean? These lower prices mean for us? Production is a, um, you know, yeah, that, that clearly is the Russia says that it was for hind there, um, you know, behind their, their whole strategy.
But I, I don’t think their strategy could have been, could have been this, you know, it could’ve been this attends to see prices this low, but you know, I was, now that they’re down here, they could, you know, they could just say, okay, well we’re gonna, you know, we’re going to whale on the, uh, on the U S producer. And you know, last, last time we were down here was just a few years ago, us production went down 1.1 million barrels a day, am I think it was like 9.6 to 8.5 when prices were this slow. And you know, so they’ve rebounded from there, you know, back to 13 million barrels a day, I think. Yeah. We’re going to see at these prices, you know, clearly is, it’s not going to be a lot more drilling going on and you know, we’re, we’re going to, we’re probably going to see us crew production decline.
It’s just like, you know, how quickly is it, how quickly is it going to decline? The EIA says that U S crude production they had us at for 20, 20, they had us at 13.2 million barrels a day for the year in their last outlook. Now there are 13, uh, which would have been, uh, which is a growth of like 700,000 barrels a day and next year, uh, they have us falling at 12.7 million barrels a day. So that, that’s not that much. You know, that’s not that. If we’re 13 now or 13 one and they say 12, seven, that’s only 400,000 barrels a day decline. I mean it could be more than that, you know, is it going to be one? I don’t, I don’t, I don’t think so. The other majors in there and their cost structure is much lower. I think half a million is probably right.
You know, so to go through all this to just squeeze out half a million barrels a day of U S production is, you know, crazy. Yeah. I mean, and some of them have a cushion of it probably hedged for 2020 at higher, better prices, but maybe not so much for 2021. Oh, I think most people are on their hedged for under hedged on their heads. Yeah. For 2021 I think 2020 maybe 50 to 60% hedge, maybe more. Right? Yeah. So yeah, U S production is going to go down there. It’s just how you know, how much, um, you know, will, that remains to be seen and we’re, we’re certainly going to see some consolidation, you know, in the, in the sector. And so bankruptcy’s probably, well, I’m just hoping Annie, that some aggressive uh, investment bank, and we won’t mention names, has already gone into Ghana and uh, Oh God, I haven’t got them to borrow money off of future revenues and you know, I feel, I feel sorry for those folks. They’re already probably counting the money in. Now it’s gone. It’s gone. Right. You know, that’s probably a higher cost. That’s certainly a big project and it had to have cost a lot of money. Same with Norway and same with same with Brazil. So you know, these are, these are really frightening, you know, frightening numbers.
Yeah. The other thing is I, I can’t tell you how many stories I’ve read over the last two years about how volatility is over in oil markets. You know, it’s talk about it Jeff. I mean part of it was the shale. You know, when prices go down they’re going to shut back, cut back. When prices go up, they’re going to come online. And, um, you know, we just saw Monday, Monday I, I tracked a second nearby cause sometimes the, the numbers get crazy as you get close to expiration in the front month. So, um, and, and so I’ve been tracking the second nearby option at the money for a long time. And, uh, Monday’s was one Oh five and a half, which, which is pro, which is number two. Since these options started trading in terms of high, the big number was, was uh, January 14th, 1991, Gulf war one just before the bombs dropped and we were up around one 35.
And then, um, in 2008 when we went from right, one 47 down to was a $35. Val got up to 105. So this is a, this is an extreme event, uh, from an option standpoint is, uh, as well. Volume day on a Monday was over 500,000. Not a record day. But what’s really, really strange to me is that on the way down, this is just not, you know, not every day, but most days I’m seeing more puts trade and calls, which you might expect, but slightly more open interest on calls than puts. So they’re both increasing in open interest, but it seems like there’s this net net bottom picking going on. So as the market goes down, yes, you’d get put buying, but you also have, it’s met with some, uh, put selling. So the, you know, the open interest doesn’t have people that already have positions.
So open interest doesn’t go up as much, whereas on the call side you start, it looks like people are bottom picking. So it’s kind of weird, but that’s what it, what it looks like. And again, I mentioned the extreme, you know, we’re seeing April, 1350 puts, may 10 50 puts in June six 50 puts ’em trade, very light volume. But, um, it’s, it’s interesting that uh, there are people that that are, that are actually doing that. So, um, and I mentioned the spread options that the a minus a dollar puts her are trading and um, those, those are the trades that were put on yesterday. So, um, so, so basically pretty, pretty close to historic, uh, stuff going on here.
Well, Jim and I talk about his stark stuff. I know that, you know, you having lived through a lot of these, uh, market declines. She’d say, my hair, what hair? If you’re down, I know you’re, if, if you were on the desk right now, odds are that a, um, you know, somebody would come to you and need to hedge and say, well, what do you do now? You know that, what do you do though that the market is, you know, in the low thirties and files are out here, how, what should I be doing a little late? I mean, the house is burning down and you want, you say, well gee, how can I buy insurance on that house? Nobody’s going to give you an insurance when, when you know it’s looking grim, you know, there, if you’re a producer, there’s existential risk. I mean, is it, does it make sense to buy $20 puts a, you still going to be viable there. It’s hard to, you know, you can buy $20 put sell $40 call, something like that. That’s for hedgers for as a, as a, I’m a, you know, as a small speculator, these are the kinds of markets that you really, you know, I remember during the stock market crash and was at 87 I bought some deep out of the money calls and it’s, my timing was perfect. The market bottom went straight up. My calls were losing value because I bought such high volatility.
So, you know, so, so in this, we had this, we faced this in Gulf war one where we were looking to buy puts for somebody in, they didn’t like the premium cause it was so expensive. And we said, well why don’t we try and put spreads? So you buy a put in a one strike, you sell another put of the lower strike and in the market goes down and volatility’s blowing out and you get very little response from the put-spread because both strikes are acting like, you know, at the money off. So they have deltas of of similar values. So, and then add the bid offer spreads in there. You’re, you’re not making very much money at all. And I remember one guy, one customer put to put, had the put-spread on market drop. We looked at the price and he was only making like 25 cents is that I’m not getting out at 25 cents.
Then it went up. So he lost. So I’m just saying it’s, if, if I’m looking at this, I’m saying I don’t, I don’t want to trade it if I have the choice now. Now, if you’re in it on a daily basis, then you, you know, the best thing to do is to eyeball it and say, okay, I need protection at, you know, 20, 25, $30. What’s the, what’s the premium price? Is that make sense? Yes, no, do it, don’t do it. That kind of thing. Right, right. And, and um, same thing on the call side, except if the market rallies pretty much, you can pretty much, I don’t want to say anything is a certain, but vowels are probably come down. So you really have to, you know, you have to look at what’s your projected price and then eyeball the premium and say, okay, if I buy this strike and pay this premium in the market goes to that price, I’ll make money. You can’t say, you know, I’m going to buy this call out of the money call. And all a market has to do is go up and I’ll make money because vowels could collapse. Like, like I was saying before, right? So, um, you know, I tend to like markets that are really low volatility moving into a high volatility mode. And that’s, you know, as a, you know, coming out as a speculator, I don’t, I, I would just kinda stay away from this market. That’s me. And I know we had spoken about this earlier in the week, but if you were an end user here, you know, an airline or a trucking company or a fleet operator, what would you be doing?
Well that’s really difficult because you have no idea how many passengers you’re going to have on your planes. If you know you’re going to, if you, let’s say you hedge, say one one, uh, you’d say a trip, I dunno, from from New York to to Mexico or something and you hedge that jet fuel and then the price of jet fuel collapses and then the plane is that the, the flights canceled, you’re dead. Right. So that’s, that’s the issue you have. I mean, I don’t, so you know, you, you, you really would love these jet fuel prices in a normal situation. But if you can’t get a good handle on demand, I don’t know. You know, and, and there’s heavy discounting discounting going on now too. So you know, you, unless, unless you are sure that this plane is going to fly and don’t think you need to be going any too far out forward to hedge these things. That’s my view. But I’m sure other people are saying, you know, take advantage of these limits.
Yeah, I mean I guess my view would be it’s certainly a challenging hedge, you know, an a challenging hedge problem. I guess my view would be that you should try to hedge something. I mean, you know, you’re gonna have some type of demand, you know, it’s just shit. Yeah, you’ve got a lot of, you know, the spaces, you know, where’s that demand? It’s basis risk, you know, do I use this diesel, you know, Chad fuels swap or crude, you know, maybe maybe go into crude to hedge. It’s, you know, that you’d demand presumably I guess, I guess it could go to zero, but hopefully not that the, there must be some, you know, some underlying demand that you can, that you can have. But again, you know, looking at the, looking at the fundamental says we understand them now. Um, you don’t really have to be, uh, you know, in a big hurry to, um, you know, an a hedge these, cause we’re, we’re Def, you know, in the first and second quarter, you know, we’re definitely gonna start seeing some, the first quarter we’ve, we’ve already seen a surplus could be as much as two to maybe even more than that.
2 million barrels a day. Right. You know, second quarter, you know, it’s looking more like it, it’s over 3 million barrels a day. Um, those are, those are, you know, those are huge numbers and that the only thing that’s going to prevent that is, uh, you know, if the Saudis and Russians get back to the table yeah. Is possible.
Yeah. I think it will happen. I just don’t think it’s going to be, you know, I think it’ll be more towards the second, you know, later in the second quarter than earlier in this section.
Yeah. One thing, just one more thing on the, on the airline or the end user hedge. If you, if you go out and hedge, you know, sell, let’s say you hedge out pretty far like a year or something in the market drops, you have to start making margin calls in the front. If you’re in this kind of demand implosion situation, you want cash. I mean, you don’t want to be putting cash out on the right. That’s good point. Right? So anyway. Yeah. And we don’t lead out, no, we have no idea where the bottom is here.
Yeah. We really don’t. And we don’t know when demand, you know, when, when is demand going to start kicking in the, the IAA, you know, incredibly didn’t really make that many changes to their U S demand. And uh, you know, you just have to look around us to know that, you know, us demand is going to fall off the table. You know, you look at the gasoline price and we know that, you know, gasoline demand is, you look at the traffic around, you know, people working for a haul. So we don’t know when that’s, you know, when is that coming back and is that, you know, that demand are people going to drive more now. They’re not going to drive, you know, maybe they’ll take driving vacations this summer other than flying vacations, but you know, it isn’t like they’re going to go out and drive like crazy. Right.
And they’re working from home so they’re not driving to work. Right? Yeah. It’s offsetting. Yeah. We’re still, listen, this is a, this is why we, we enjoy following these markets. This is a little crazy for us, but um, it’s, it’s just, uh, one thing after another with this oil market. Yeah. Yeah. Um, what else? So we talked about gasoline, diesel, what else?
Diesel is diesel is actually been hanging in there relative to gasoline. But I think, you know, there’s been a lot of Widowmaker training, you know, get me, get me out that diesel cracks are, uh, are holding in and diesel, diesel, diesel inventories have, uh, have drawn nicely here. Actually, gasoline inventories are drawn nicely too, but the market didn’t care much about that. You know, they were just like, every out of this thing is going negative zero where you, I mean you already had flushed and whole bunch of diesel specs out. Right, right. You’re already anyway. Right, right. The I am what the, a IMO didn’t play out quite as they thought. It wasn’t so much the IMO. We haven’t had a winter here, you know, at least in the Northern hemisphere. So it’s, you know, global decline in diesel fuel. It isn’t like demand was roaring in the first two months of this year anyway.
You know, besides a ex, you know, besides the coronavirus demand, demand destruction, you know, the winters has definitely taken out some, some demand and margins, you know, because of gasolines collapse here in the last couple of days, you know, March and Snower, you know, the, the pathetic, you would have thought that, you know, I think they will improve only cause crude is, you know, crude should be, should theoretically, you know, be somewhat cheaper than the, than products. But the market, you know, just blistered gasoline. So it’s, you know, it’s changed some of the, the refining margins and then, you know, we’re, we’re at the point where, okay, what happens with fill up all this crude storage, you know, and that ultimately has to go somewhere, right? Yes. And that’s, you know, that’s going to be in products. Yeah. But that’s, that’s another, that’s for later on. That’s another story later on.
Yeah. And then it, you know, you listen to the financial, uh, news and, and you know, people talk about, well, how is this market gonna come back? So, you know, are we going back to normal? I don’t, I don’t know. I don’t, I think that takes, you know, people are really fearful right now and right now. Yeah. Yeah. So we have to hope and like, you know, a couple of months maybe, you know, if this fire is size out and, uh, people get, you know, start getting back to normal, there’s clearly going to be a stimulus package, you know, may, maybe that’ll help. Um, and, you know, and hopefully some of these small businesses can, can survive these, these next couple of months because, you know, then not only the large ones would, obviously the, it’s the smaller vendors are really getting hit here.
Yeah. We just, uh, again, we don’t know how this thing, even though we’re in the midst of this, you know, you could have modeled that this, that maybe March was the peak of the virus and maybe April as well, but it starts dying down. But living through it, I don’t think he could have sort of predicted the kind of, um, call a panic, but educated panic, I don’t know what you want to call it, but, uh, the, the precautions that people are making and it’s kind of the downward spiral, the, the connectiveness of all the, um, you know, like, like you were just saying the small businesses taking hits. Right. You know, you didn’t, you just didn’t know how it was gonna play out. So what else, Sandy, what, uh, what else you want to talk about? One thing I mentioned the, um, I was just looking at the carbon credit markets in Europe.
They have a ice has a futures contract. And I had read a financial times story about how, you know, the, the virus was coined, uh, was causing levels to be really, really low significantly. And I said, Oh, I wonder if that would spill into the European, uh, futures market. And, and it, uh, doesn’t seem to have, I mean, it’s, it’s not going up, but it’s just kinda, it’s maybe at the lower end of a range, but, uh, I don’t know if there’s other, it’s like, it’s like looking at the Clorox stock, I guess. What, what, what kind of things is, um, is, are, are the virus, uh, reacting or what, what, what kind of, um, markets are being, uh, uh, put into, uh, uh, upheaval other than the energy markets. But, um, that’s one of them that I was looking at. What else I have to say?
You know, when you look at some of the stock guys calling stock prices at the end of the year, some of them have the same, haven’t changed their number, suggesting that this thing’s over soon. And not that we get back to normal, but we get back to, uh, you know, an upward trajectory. And, uh, my only comment on that is, um, you know, it’s isn’t the path we take more important than where we ended up at the end. We could go down another two or 3000 points and there’s going to be a lot of people aren’t gonna be around to say, Hey, you were right on your, yeah, you are right. Anyway. Okay. So should we stop it there? And, yeah, I think so. We went through, we went through a lot of things and, uh, you know, I think we’ve, we’ve both said that, um, you know, the, there’s plenty of uncertainty on, uh, you know, on both sides, on the demand and the supply side. And, uh, you know, hopefully the Saudis and the Russians have, uh, you know, are able to work out some, some kind of, uh, some kind of detente and, uh, the market, you know, and demand goes back to more towards normal in the, in the second half. And, um, you know, we can, we can kind of stance launch the, uh, you know, staunch the bleeding here.
I think, um, maybe a MBS has read a Daniel Juergen’s book where he talks about, uh, John D Rockefeller and his, uh, old-fashioned sweating where he would just lower prices against this competition until they couldn’t take it anymore. So maybe, maybe this is old school policy.
Yeah. Well, it’s a cyclical business, that’s for sure.
Okay. So we’ll pick it up next month, Andy. Thanks.
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Great. Thanks Andy.
Thank you Jim.