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 here with Andy Lebow, also of Commodity Research Group, and we’re here to talk about energy markets.
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And it’s in the afternoon, August 17th.
Andy Lebow, this is our first podcast in two months. We took a month off, but the market has been coming off showing some weakness. We’re up at $74 in October. And, uh, now we’re at $66.47 when some folks were expecting us to be much higher by now.
Well, I think that there are two major factors and they, of course are related. One of course is the fundamentals which we will discuss in details. And a second has been flow has been, uh, order flow. And, uh, what, what we’ve seen is the liquidation of the big trade for, uh, 2021 for at least for the second half of 2021 big hedge fund positioning for rates to go higher and inflation higher and crude along with it, uh, we saw net length get up to, um, 425,000 contracts on June 15th, a 23 to one ratio of longs to shorts, which is, uh, just way off the charts as of, uh, August 10th, that not that net length got down to 287,000 contracts. So we’ve seen 140,000, uh, contracts liquidated as, uh, the market did not, didn’t go up. It went down, uh, contrary to, uh, contrary to expectations and it was, uh, you know, uh, the classic, everybody trying to get out through, uh, uh, uh, tightening, uh, exit. Now, if you look at the ratio, you know, I mentioned that 23 to one, we’re now down to a seven to one. And according to, uh, the work that, uh, one of our colleagues Billy prominence done, the five-year average is around two and a half to one. So there still could be some room for the, for the market to, uh, liquidate, could liquidate further. Uh, and that wouldn’t surprise me in the least Jim, if we, if we saw some for the liquidation. Yeah.
It’s, uh, it’s interesting. Um, I was just, I was looking at the August, uh, short-term energy outlook put out by the EIA and in their summary. Uh, once again, they write about the, uh, heightened uncertainty due to COVID. And you want to just, uh, talk about the Delta variant for a second.
Yeah. Cause that why, why is the exit door narrowed in, and then the net net length habit having to, um, having to liquidate, uh, it’s because of a change in perception, a change in sentiment, and that’s all due to the Delta variant, you know, many, the reason I think many of us myself included just a few weeks ago, you know, we were looking at, at balances that showed a really significant drawdown in the, in the second half of, uh, of 2021 based on rising demand expectations. And now, uh, all analysts and traders are furiously trying to figure out what the effect of, um, the, the Delta Varian is going to be on, on demand. And as we know, from, from the last year and a half, there’s an immediate effect on, uh, petroleum demand and in particular transport demand. And of course, if it has an effect on the, uh, you know, the global growth that’s gonna, that’s petrochemical demand and, and certainly, uh, diesel demand.
So, you know, now that now the challenge is to figure out, okay, so what’s the number, you know, w w how much is the going to be down? I think the IEA came out with, uh, I think there was 700,000 barrels a day lower in second half. I think Goldman was talking about a billion barrels a day. We are, we’re looking for right now, a third quarter decline of about 700,000 barrels a day in, um, in global demand. And that is, uh, you know, off around the 98 million barrel a day number. So was still less than one now for fourth quarter. I, you know, I, I marked it down only 200,000, but I, I don’t know. I mean, we have to see how we have to see how things develop. I mean, certainly, you know, the there’s been, there’s been restrictions, but probably than, you know, certainly less than, than, uh, than last year.
But, you know, again, I think we have to see how things transpire as we head into the fourth quarter. You know, I feel pretty good about the 700 number, but, you know, I could be wrong by anywhere from, you know, from half a million to a million barrels a day, I was going to say by 700 or by 700, maybe it’ll be up well, you know, it’s interesting India demand. They, after the, you know, they had, I don’t know, maybe it’s their third wave. You lose count of the waves within, they obviously had a terrible go of it in the, in the spring and early summer. And, uh, that their demand looks like in July, at least gasoline demand was higher than, uh, than pre COVID. So they had a nice comeback in India.
I was wondering about, um, we, we were talking about, uh, gasoline demand coming into this summer. Uh, the pretty good, pretty strong, you know, was people, you know, kind of do driving vacations relative to say flying vacations less, uh, international travel would keep the, uh, jet fuel demand down. That was, that, is that pretty much, uh, still in play? That idea is as gas demand still pretty robust relative to say a jet, maybe even diesel.
Yeah. Gasoline demand, uh, at least through July, uh, July, I think is going to come out around two, four to nine, four to a nine five. I think August is going to come pretty close to that. Gasoline demand has, has been, uh, it’s come in certainly better than what the EIA had expected, uh, which is no big deal because their number was, was, you know, just ridiculously low, uh, for their expects for the summer demand. I think they had a, you know, low nine number, uh, for, for the summer. Uh, and I think,
So, I just want to interject you, you know, I love the EIA, but they, it looks like they, their forecast change was one of them was that they lowered, uh, uh, OPEC production by 600,000 barrels after know, after they saw the, uh, OPEC meeting, what came out of it and in the market came down, I feel bad. Right.
Well, you know, yeah. Well, first of all, their number was, again, I love the EIA also. I think they, they do good work. You can’t get it. Then they put out a lot of numbers and a lot of data and you’re not going to get them all right. But that one, they were way off, you know, you could see, I think why soon as they came out, whenever that was months ago, I was like, what, where are they getting this from? But
Also we always talk about how it’s, w w we’re trying to predict things that are moving around and, you know, since COVID, they’re moving around, that are at a rapid rate. And, um, I just wish more forecasters would recognize, even though it sounds starting to sound like a broken record, I have to realize how hard it is to forecast forward. They still, many of them come out with the same confidence of a days when, you know, before all this stuff. So, anyway, it’s impossible. It’s impossible. So, yeah.
Is impossible. I mean, the set, um, that they put out a lot of numbers and, um, you’re not, you’re not getting any of the, you know, you’re not getting all of them. Right. But they do, they do a pretty, I think they do a good job and certainly their, their weeklies are, are, you know, they’re, they’re very volatile, but, you know, they, they serve, they serve an important function and they, they usually get it. Right. You know, uh, unfortunately that petroleum supply monthly comes out once from now. I mean, this month is for week four months ago. Yeah. Yeah. So for us, right. For the, for the market, that doesn’t, that doesn’t do a lot of good, but anyway, let’s get back to the back on subject. The gasoline, I think gasoline demand this summer has been, has been good as advertised, you know, came in pretty much what we were looking for. Uh, and now let’s see, you know, as we head into in August, I think it will be good. Uh, and seasonally, gasoline demand usually comes off, uh, as we head into September and October is vacations. And so you’re seeing improvement in jobs so that, that, you know, that that’s helping.
Yeah. Uh, before we get to jobs, I wondered, what’s your take on the, uh, refinery response or runs to this gas demand? To me, I just felt like I expected them to come back a little harder than that. And then to watch the gas crack go up and up and up finally coming off.
Right. I, yeah. Gasoline stocks have really have really drawn here this, this summer and refiners, you know, they really didn’t respond the way I thought they would by giving them by producing more, uh, more gasoline, you know, they were to a certain extent leery about, uh, producing too much, too much jet. Right. Uh, and you know, they’ve kept run. This runs have gone conscious easily. They’ve gone down, then we’ll see, you know, w in September, I think they may be stronger. Margins have been good. I mean, Gulf coast margins are really good. So, you know, I think September runs will be maybe higher than originally forecast. And then in October we go into, uh, you know, go into turnarounds in October and November. And of course it’s hurricane season. Uh, I was just going to mention
That, when are you going to bring up hurricanes it’s
Hurricane season? And that, you know, we’ll see what happens. You know, sometimes when they’re, as you know, too, sometimes when they forecast like, oh, it’s going to be a really big hurricane season. There’s like, no hurricanes. Yeah. Well, what was the year?
The year after Katrina was like that, wasn’t it. I was like, we were supposed to get as many hurricanes.
I think it might’ve been two years after Katrina
Because I thought they, yeah, they were, they expecting the same amount and it was almost zero, but I do wish I hope someone from the CME or the ice is listening to this. I do wish we had a very active, uh, crack spread option, you know, just, uh, you know, the, the, the, our Bob contract against any of the crudes, WTI or Brent and the, uh, diesel contract against the, uh, I know, I know it’s listed, it’s just, doesn’t trade they together. They need to go, uh, visit a couple of our friends in Houston and, and rev this thing up. Cause it’s, there’s just lots of plays, I think, in the, in that market. Oh yeah.
For refiners. So it would be great if that had liquidity
Or market make a friend said he stopped doing it. Cause the paper just came one way was all refiner hedging. Right. I don’t think you’d see that now. I think you’d see, you know, come all different kinds of directions.
I think you’re right. And, uh, yeah, I think the industry could really use liquidity in that, in that product. I know.
So Andy, uh, what’s, what’s going on in China, they’re big, they’re growing. They’re not growing, they’re dumping. They’re not dumping. What are they doing?
Well, I think the, the market is, is certainly laser-focused on, on China these days. One thing that, uh, we’ve seen, you know, we’ve, we’ve seen global inventory straw now for four quarters in a row. And a lot of that draws coming out is coming out of China. Remember China wisely bought amazing OSS of incredible amount of crude. When prices collapsed in the second quarter of last year, they, they bought so much crude that there was the traffic in, in most of the, in many of their, uh, in many of their ports. And they, they really didn’t get it on low. Couldn’t get it all unloaded until, uh, like fourth or first quarter of this year. Uh, but it gave them a lot of flexibility. So when prices, prices have surge in the second quarter here, you know, they’ve been able to run down inventories. They ran down inventories in, uh, in the first quarter.
So, you know, they have, they haven’t been as active on the, uh, on the buy. And certainly as in the rest of their economy, they are, they are coming down harder on, on, uh, on the regulatory side, you know, in terms of, uh, imports and, uh, and the exports. I think that, um, so, you know, the second quarter lovers are going to look a little bit soft for, for China, but, uh, but I think second half will certainly, I think we’ll see a pickup, particularly as prices are, uh, are coming off. I th I think net net, you know, China’s still going to end up somewhere. It’s not going to be a million barrel a day growth this year would be slightly. I think it’s going to be less than that. I think it’s going to come in around 800,000 barrels a day, which is still pretty, pretty good for growth because last year they had a, you know, they had a good day at a very good year in terms of, uh, demand growth, um, relative to the rest of the world. They actually grew a little bit last year, uh, while the rest of the world was, uh, you know, it was collapsing. Yeah.
Um, on that point, do you, do you have us, um, do you have, uh, 20, 22 demand over, uh, 2019 or no,
I actually do have that. Um, you worked out those numbers. Yeah. Uh, I have, uh, up by about, over a little over 3 million barrels today, I think OPEC is, let’s see, OPEC has 96. OPEC is over 4 million barrels a day.
So this is, uh, what over, what, when you say over a year, year over year, so, okay.
So roughly like 3 million barrels a day and that’s from the six and a half.
I’m sorry, just to explain that number for
Me. I’m sorry. I’ll pick as OPEC is up 3.3 million barrels a day, total demand. So let’s say OPEC, you know, they’re close to a hundred million barrels a day expectations for, uh, next
Year. I’m sorry. Yes. The OPEC report that comes out. Got it. You’re right. Okay. Sorry.
Sorry. Yeah. Now, you know, if you look at w if you look at this OPEC report, by the way, the one that came out Thursday, this last Thursday. Yeah. You know, it was really bearish because they didn’t change. They didn’t change demand in the second half, which I don’t understand the second half of 21, but if you look at 20, 22 first half, uh, they, they don’t give you what they think OPEC production is going to be. But if you, if you use, um, let’s, let’s just use the EIA numbers. Cause the EIA does expect does give you what they think OPEC production is going to be. You know, they, they’ve got builds of, uh, to, to, you know, first quarter that OPEC report is looking for, if you use the, that OPEC report is looking for a build of 3 million barrels a day in order, and then like 2 million in the second quarter. Now you’re not going to find that in the OPEC report. And if you go read that and go, what is this guy talking about? Right. You know, what I’m doing is what I’m doing is just using what the EIA thinks OPEC production is going to be in the first half and just using that number. And if you’ve put it into all the balances, you’re going to get a big bill. That’s bearish.
I was noticing that. And I’m glad you brought that up. I, uh, I, um, I’m not sure our listeners, uh, once they’re done with this podcast rushed to read the, uh, OPEC report, but it’s, it’s still the OPEC, the IAA and EIA pretty good to, uh, look at, uh, each month, just to kind of, you know, it’s almost like bouncing off your ideas with somebody else
Now to look at, you know, what we’re looking for is about an 800,000 barrel a day build while others have, you know, others have, um, either unchanged or, or, uh, you know, build the AIA has a build of about half a million barrels a day. So, you know, those are, those are bearish. And, uh, you know, and this is without a ran on the market. You know, this is assuming that OPEC unwind that steel for OPEC plus on wines, it’s steel by 400,000 barrels a day, each month, every month, you know, through, through may. And if they did that, we’re going to see big builds in the, in the first half. And that’s without a ran on them, you know, ran increasing production.
Oh, they are, they still meeting month to month is the next meeting? No, they’re meeting.
They’re still meeting month to month. I don’t think nothing’s going to happen this month on it.
Okay. They feel like they’re in good shape. Um, the price. So we talked about the price coming down and, uh, where does it go from here, I guess is my question. Do we have, do we have a lot more downside? Do you think I don’t, I don’t think term.
I know. No, I don’t. I don’t think so. I mean, w what I think has happened to this market is because of demand, expectations, being lowered as much as, as they have been. I think the range has been lowered. You had, uh, people looking for $80 a barrel. And, uh, you know, I think that those hopes are dashed to a certain extent. Uh, and I think the range for WTI, and I think it could be like 60 to 70 or 62 to 72, something, something like that. Now, if, you know, if the goes away and, and everything is, um, you know, good, good to go in the fourth quarter that that could change too. But you know, that, that again is that’s to be determined.
Right. And, and so it’s all contingent on this, uh, you know, thinking about, uh, we’re seeing more drive it, we’re gonna see people still drive it. People go back to it’s back to school. So I think that’s where you see some of the, you mentioned a lot more people going back to work, however, they might not be driving, you know, they might be working from home. Right, right. So you have to adjust your models. Right. And
A lot of, a lot of companies, at least, um, yeah, locally, they’re there a lot of been talking October, but some were pushing it back to, uh, January. I think Amazon, uh, pushed it back till, uh, till January, uh, the return to our returns offices. Yeah.
I think that’s, uh, that that’s, uh, also a moving target now, you know, anecdotally, I think that’s people seeing a lot of pushback in, you know, in even when they go back, it’s going to be, you know, fluid or people go in for three days, but maybe not, you know, it’s gonna be, it’s gonna be interesting, a lot of, a lot going on.
Um, the other interesting thing, are they going to take mess? They’re going to take the train. Um, you know, I don’t see why not. I think the train is fine, but, you know, are they going to drive? Yeah, we’ll see. It, certainly traffic has been pretty, the traffic’s were pretty intense. This, uh, so far in the second and third quarter,
Um, Andy, we’ve got an issue of climate change, or at least as a, I took my son to school when he was in kindergarten and this a young woman, young, young girl students said that it’s frigging out outside and I always love her expression. So I say it now, it’s it’s. Have you seen any, does that show up in your numbers that, that it’s, uh, you know, they said it was the hottest July on record. I, I dunno. I mean, you see that.
Well, I think for natural gas, it’s definitely. Yeah. I mean, that’s been, you know, that market has been, um, obviously very, very strong, you know, I, I don’t think so much, um, because no petroleum is, is not a big, you know, use that much petroleum for, uh, to generate, uh, electric demand, electrical demand. So
There’s less and less diesel. Yeah,
Yeah. This hardly any of these days or, or, you know, very, very little so I don’t think it has as big of a impact now. Certainly, you know, we could talk about what’s going to happen over the next, you know, five to 10 years, that’s going to have a big impact, you know, the whole notion of, uh, of climate change and the transition, but we’ll be talking a lot about that, Jim. I know it’s
A, it’s an, a very interesting as now, you’re you get more and more stories about the pushback of, we want to get our current government wants more EVs, but there may not be the supply chain, you know, those metals to get to where they want to go. So it’s going to be interesting to think about as we go forward. Okay. Our government,
Our government has, um, you know, it’s definitely trying to hasten the transition away from a petroleum, but then at the same time, they have the nerve to ask OPEC to increase productions. It’s really, you know, you don’t know where that, and, and clear, you know, OPEC, wasn’t going to do that. I guess that was a political, just the theater.
Gee, I mean, that’s, yeah. I don’t know. I don’t know that should have been behind or that should have been behind closed doors
That shouldn’t have been, uh, if, if they, if they were successful, which it was sort of a hail Mary, this is, you know, OPEC is saying, and when it happened, I said, they’re going to just say we are increasing production, you know, it’s coming. Right. And it’s exactly what they said.
Yeah. It’s, it’s interesting. Uh, we had a couple of years where OPEC is as, as a group is, is highly successful in a increasing demand, uh, situation and, and very, uh, unsuccessful in decreasing demand. So it’s almost like, uh, are they, are they really driving these markets at all? This is like, you know, I would say that they’re, uh, they’re increasing by 400,000, 400,000 barrels a day. And, um, you know, I guess the markets come off, so that’s a little bit, but it’s also COVID in there, but yeah, no,
Jim, I think they’ve done a pretty good job of managing the markets since they completely undid it last year.
Thank you. That’s my point is really good after they’re really bad
Churchill line above the U S where we’re, uh, we always do the U S always does the right thing after they’ve done every other possible thing first. So, um, okay. So let’s get back to the prices. So you’re, you’re thinking kind of a range going forward, um, as all these, uh, you know, the COVID OPEC policy, O U S U S production rig counts. Does that, does that give you any, uh, optimist optimism that we’re producing more, less than what’s in these numbers? Or w w what, what, what’s your comment on that?
The, the EIA got, getting back to the EIA is looking for production to be pretty flat. Actually, we’re at 11 three, I’m looking at the, they’re looking for 11 in the third quarter at 11 to six, and I’m sorry, 11 to six in the third quarter and 11 three in the fourth quarter, we’re at 11 three right now. And then, uh, next year they have a first quarter 11 five second quarter 11, 6, 11, 9, and 12 one. Firstly, I think that they’re low for, uh, the second half of this year. Uh, I think Q3 is going to be closer to 11 four, and I think Q4 is going to be closer to 11 45, 11 5. Uh, so I think it’s going to be higher, but frankly, it, it, you know, I’ve thought it was going to be higher on year. And, and, um, the, the U S producers have done a pretty good job of, uh, of being disciplined and not really not really going forward on the, on this rally, but we have seen the recount is doubled, you know, in a, in a year.
So, uh, I think the production is going to be, uh, is going to be somewhat higher where we are also going to see what we are seeing growth is on NGLs. Um, NGL production is up 600,000 barrels a day from Q2 to Q1 and then flat for the, the rest of the year. But next year, the EIA for 2022, Jim, yes. Looking for a half a million barrel a day, increase on a NGL production and 600 on, um, you know, on crude. So that’s a total liquids increase of 1.1 million barrels a day. That’s a lot.
Yeah. I’m thinking, as you said before, it was going to be a builds in the first quarter and second quarter. And if we get some kind of hiccup and demand going on, you know, towards the end of the year, maybe that maybe this virus, uh, gets, gets full, you know, full force, um, you know, that, that might be an interesting first quarter.
Yeah. You know, it’d be interesting to see, you know, are we going to see pressure price pressure from the back price pressure for the front? You know, how is that going to, you know, how is that going to work? Certainly the curve has come off a lot. I mean, the curve has really gotten crushed, uh, here. And I think that, again, that’s, that’s part of the expectations, you know, when you start cutting demand down that much, you’re, you’re, you know, the curve is going to go lower. Now I have a question for you. Um, I think you had mentioned that the big open interest for, uh, options was, it was a DCE 22.
Yeah. We’ve been talking about that since the beginning of the year, how, uh, there’s like 70,000 open interest in DS $2,200 calls and, um, it dwarfs number, number, um, let’s see. Number two is the DC 20, 21 75 qual with 31,000. And that in the highest open interest put is the DS 50 put with 21,000. So, you know, that’s where a lot of it may be, uh, mainly one trader, but I don’t think it’s all one trader and, you know, four of the top 10 open interest strikes, four M calls are DS 22 calls. So hundreds 90 eights, that kind of thing. And it’s just, uh, unusual, but that, that hasn’t been active in a while. It’s why has been kind of, I have to say it’s kind of like a summertime vacation volume occasionally, uh, a couple of days over a hundred thousand, but not, not big volume.
And, um, you know, if you look at the total open interest, 1.1 0.4, 8 million in calls and 844,000 in the puts, and that would kind of go along with, you know, I think w w the numbers you’re giving for the, uh, net length for funds was, um, options adjusted, wasn’t it? Yeah. Yeah. So, so whatever, you know, if they bought call spreads, that would be, uh, you know, uh, if the funds bought cost reds, that would be, uh, not as bullish as if they bought calls out. Right. Perhaps. Um, so, but, but, but the bullish bearish stuff of the funds in the options market shows up in those numbers that you mentioned already, but it’s just more, you know, more along what we’ve seen, uh, for a while, people really get revved up about a hundred dollar oil and, you know, it still could happen, but, uh, sure. Not today.
It’s not, yeah, not today. Just a quick exercise
Are we let’s take the going a month out, so it’s, so it’s August give it, give it to the end of September. I think we’re more likely to hit $80 or a $50 or neither. Well, either that’s a neither, but if one had to be hit, so do you have a bias I’m one or the other
In the next couple of months next month, say, okay, give it two months. Yeah, I guess it would still be the 80. It’s still be the 80 would still be the 80, because we, you know, even though, you know, you look at these stock draws and okay, it’s not going to be as much as it was before still draws. It looks like it’s fill draws. And you look at, you know, you look at inventories, Jim Glo global inventories at the end, the OECD inventories, according the IEA. Yup. It’s 60 million below at the end of June is 60 million below the fit. The five-year average, 2015 to 2019, let’s throw out 2020. So, you know, we’re already low for drawing stocks. We’re going to get lower. So, you know, w w at the end, if we draw stocks, just looking at, you know, my own numbers, you know, I have a, a hundred million below the five-year average by the end of the year, you know, that that’s not bearish,
It’s not perish as it does. It means the, um, you don’t think the market’s going to crap out here. I really don’t. We, as we always say, all things are possible.
Oh yeah. All things are possible. I mean,
Maybe, you know, uh, the market we’ll see what happens. You know, if let’s say these talks are rescheduled, you know, the Iran us talks, you know, maybe, maybe, you know, maybe in the market takes another, another leg down. Uh, they could be rescheduled, but nothing comes of it. Well, we’ll see right now, I think the market is not expecting very much to come out of the, the, uh, you know, out of that nuclear, the, the U S getting back into the nuclear deal.
Yeah. Um, it’ll be interesting. I kind of think the administration needs a, uh, I don’t know, we’ll call it a victory foreign policy, but something like a good, a good outcome. And I I’m, I’m not sure which it is. Is it, is it an Iranian deal or not under a rainy deal? That’s right.
Yeah, that’s right. But that, you know, that’s clearly going to be a big fundamental, because Iran can quickly put out a half a million to a million barrels a day, uh, onto, onto the market. And if that’s the case by, let’s say, it’s, you know, if that’s the case, then a lot of these, you know, a lot of the draw there’ll be no draw. Uh, you know, it’ll things will be flat, uh, to maybe build. And then we talked about the first half built. Uh, so OPEC is going to have a lot of work to do.
Yes. Um, just wrapping it up. So, so we’re going to look at this array, you know, continue to kind of focus on whether the saran deal gets done. Focus. Obviously we mentioned, uh, COVID the Delta variant, any other variants that come along and what always OPEC policy or policy, that’s pretty stable though. Don’t you think for awhile now? The OPEC policy? Yeah. I mean, they’re going to like where they are. Think, I think,
Yeah. I think they’re okay here. And what else are we looking at? Well, China, I mean, China, the China, and certainly if we’re looking at the, uh, you know, the stats, we’ll see how, you know, we’ll see how demand, uh, plays out here in the, in the third quarter, you know, we’ll see where August gasoline demand. The other, the other thing that I didn’t mention, diesel demand is sort of plateauing. Uh, and I think that’s a function of people on vacation that is, uh, that doesn’t seem to be the demand for goods. The retail demand for goods may have waned. Some retail sales were down today. I actually
Have a couple of packages from my cause they’re on vacation. So yeah, but it’s not, not
The point. The big point is people are spending money on that rather than goods over the last couple of months. We’ll see if they come back. And of course the supply chains are all messed up. Uh, but you know, diesel demand is, is, as I said, it’s, it’s plateauing here some, and let’s see how you know, and that, that too is that is a story of a global economy and, and the supply chain. So we’ll see how that, you know, how that plays out. I think retail
Sales were down today, weren’t they? Yeah, yeah.
Yeah. That’s what I was saying. They were down, I think 1.1%.
You want to wrap it up, Andy?
Yeah. Let’s just for some final comments, not necessarily on the market, but we just did a podcast with Amy Jaffe.
We talked about the energy transition today and Amy’s written a new book called the Energy’s Digital Future. It’s excellent. And we did a podcast with Amy, which we are going to post very shortly. So I urge everybody listened to that and you can find me firstname.lastname@example.org and I’m on LinkedIn.
Yeah. You can continue to connect with me on LinkedIn. I say yes to everybody, so, okay, Andy, thank you very much. We’ll see you in a month.