[New post] Another Energy Crisis Coming? More Big Energy Policy Blunders As Oil Heads Towards $100?
User ID posted: " https://www.youtube.com/watch?v=jSXwt02UDiA Another Energy Crisis Coming? More Big Energy Policy Blunders As Oil Heads Towards $100? by Jason Burack Are headed towards another energy crisis in the US? No new oil refineries allowed to be built in the "
Are headed towards another energy crisis in the US? No new oil refineries allowed to be built in the US since the 1970s and oil pipelines and drilling permit are blocked to stop new supply.
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Despite all the craziness happening in the stock market lately all the craziness happening with the VIX, the VIX was over 30. The VIX has been over 30 now for over a week which is very alarming signaling a potential stock market crash in the not too distant future if the VIX continues to head higher into the mid to high 30s it could approach Lehman Brother levels and then the fed's threatening of one quarter point interest rate hike in march we'll see if they actually do it or not if they do actually do it we are looking at the leverage short volatility trade a lot of these over leveraged hedge fund trades from family offices hedge funds and portfolio managers at investment banks blowing up so all these deflationistas that are leveraged bond fund managers their trades that they're counting on probably won't go the way that they think they're going to go anyways I wanted to talk about oil in this short little video the oil price and I put the chart there the one year West Texas intermediate chart on the right hand side of your screen the oil price has been on a tear for the last like five or six months really the Biden administration attempted to manipulate the oil price down a lot by coordinating with five or six different governments and dumping the strategic Petroleum reserves that lasted for a little under two months that managed to knock the oil price back down but here we are the oil price is rallying it is now back above 90 a barrel the oil price had a big pop on Sunday night early Monday morning and it looks like potentially we could get to maybe a hundred dollars a barrel in a month or less if things continue and the oil price and the natural gas price are holding up very, very well despite the threat of interest rate hikes despite the volatility and problems in the stock market so in my opinion this has more to do with supply and demand fundamentals for oil and natural gas there was also last week at the end of last week a very big short squeeze in natural gas in my opinion based on what I saw in the natural gas market here in the us with natural gas prices a Chinese government shell company after a lot of Chinese oil companies bought too much liquefied natural gas cargos and they were trying to temporarily dump them onto the market to knock the price down someone was greedy who had a lot of cash and not a lot of trading experience my friend Aaron who does this week in charts for me once a week we discussed this before he put it out in the video that's why he mentioned it looked like it was a government trader that they attempted to short the natural gas price last week a lot it got the monkey hammer and then there was an enormous short squeeze and natural gas prices actually rose the most ever in a single day so natural gas and oil look to be holding up very, very well at least in the us dollar price but the fundamentals for natural gas are actually very strong as well there are supply problems for natural gas there are shortages for natural gas and electricity in the united kingdom in the European Union and in China, still China probably didn't want the natural gas price rising too quickly but the amount of imports of natural gas and LNG into the European union there are stories on oilprice.com talking about how the amount of imports of liquefied natural gas and natural gas into the European union is five times more than the amount that they used to bring in from Russia so a lot of natural gas is needed for energy electricity fertilizer so many other things in the European union there are big, big shortages and American firms like Chevron, EOG Resources, China Energy have been big, big winners some of the laggard some of these companies that have not done very well some of these mid-tier oil and gas independents that have lagged compared to EOG Resources or chevron they could potentially become takeover targets here in the US in the next six to 12 months I'd like to see Chevron and EOG Resources go out and do some acquisitions actually over the last six months Exxon Mobil sold natural gas assets instead of trying to acquire more although they've been investing more into offshore in their west African oil discovery their massive one but Exxon Mobil has balance sheet problems with debt so does Occidental Petroleum probably why Occidental Petroleum after they bought Anadarko with so much debt why that combined company even though they have great assets has not been bought they still have too much debt right now on their balance sheet and an acquiring company does not want to take them out anyways besides just doing some normal oil market analysis I wanted to talk about problems with the oil market so you have these articles coming out with people who don't have as much experience in the oil market my day job in the past in the financial industry I worked with Robert Rapier over at investing daily I was an oil and energy analyst if you're not familiar that was one of my day jobs in the past we used to cover oil and natural gas stocks, MLPs the large caps of mid tiers, so I've covered a lot of these companies over the years and unfortunately the mistakes that are being made by politicians bureaucrats regulators in the United States in the European union actually it's all over the globe it's across the board the policy mistakes are the problem you see headlines and I put the square the red square around there about white houses considering more oil price controls and these article headlines are that Biden desperately needs to bring down oil prices well how is he going to bring down oil prices they're not doing rational common sense policy to actually help the economy if these politicians bureaucrats and regulators were not being overly influenced by their environmentalist base and that's the main problem here you have the Biden administration you have the democrats in congress they do not want to approve more oil and gas drilling they do not want to approve more pipelines because they're environmentalist-based will not allow it we'll vote them out we'll replace them we'll defund them we'll make sure they can't get re-elections we'll make sure that they don't get millions of dollars potentially in profits from these green energy companies that are all going to get unbidded ESG contracts from the department of energy while the democrats have a slight majority in both houses of congress until the next congressional elections so you have big, big policy mistakes common sense rational policy to actually help oil and natural gas prices would be to allow more oil and natural gas permitting and drilling on federal lands with the Permian Basin in New Mexico or to allow more pipelines here in the United States allow more nuclear power plants to be built those types of things rational common sense to alleviate supply problems instead you have politicians bureaucrats and regulators because they don't want to do rational common sense policy with energy and giving oil natural gas companies the ability to increase supply you have these politicians bureaucrats and regulators instead talking about more and more market manipulation more and more price controls taxing oil and natural gas companies forcing them to invest in green energy installing activist investors onto the board of directors, green energy ESG activist, investors, so these companies are forced in to allocate capital even more inefficiently and it's just going to make an even larger mess of things so unfortunately things are going to get worse before they get better and this is why even if oil prices keep rising more and more supply may not come back online quickly that and so much of the world's oil and natural gas reserves are not owned by chevron are not owned by Exxon Mobil they're owned by national oil companies and I talked about this extensively for patrons I spent about five hours worth of work on two extensive articles last week one of the articles was talking about Pemex which is Mexico's national oil company and all the financial troubles and how inefficiently run Pemex is and how their oil company is now causing enormous financial problems with the Mexican economy and the Mexican government all because Mexico's oil company is not efficiently run they're not making enormous oil profits and they're not exporting oil for us dollars that is causing immense amounts of more problems throughout the Mexican economy finally if you like content like this I want to help keep content like this free so it doesn't all end up behind the paywall or you want far more in-depth content research financial education and analysis than I provide in the short load of free videos they're now over 200 articles and audio podcasts behind my paywall exclusive for my patrons for only five dollars a month I think is one of the best deals out there and just in the last 27 or so weeks there are now 41 new articles and audio podcasts including two new in-depth articles that took me over five hours worth of work on a mining industry investing update with a lot of charts and analysis about where large mining companies large and medium-sized mining companies are now allocating their capital over the last six 12 18 months there's big trends now and trends are shifting countries are changing their tax laws a lot of it's based on the copper price and then also one about how mining is not as safe in Mexico as it even was three or five years ago because the amount of corruption increasing and how desperate for tax revenues the Mexican government is now to replace lost oil tax revenues even though the oil price is high because of how inefficiently run Pemex is which is their national oil company there's also audio podcasts about the uranium market over the last five or six weeks two audio podcasts with Urani market updates and I suspect in the next week or two there will be another oil and natural gas either article or audio podcast out for patrons all for only five dollars a month so if I could wrap up this short little video very quickly policy mistakes are the main problem you have politicians bureaucrats and regulators for oil and natural gas here in the United States they are making it more and more difficult for oil and natural gas companies to increase supply it is very inefficient tax laws rules regulations red tape even getting permitting some of the best drilling areas are on federal lands the Permian Basin in New Mexico and others and it is becoming more and more difficult for a lot of oil natural gas companies to increase supply here in the United States if oil prices do go higher if congress does not change to majority republican the oil and natural gas companies could potentially be looking at much, much higher taxes some type of punitive tax for oil and gas but these governments at the state and local level and European governments I'm seeing absolutely crazy gasoline prices people posting absolutely crazy prices for gasoline by the leader in Europe it's insane how high it is these governments are taxing these oil companies more and more and more the governments are actually making more money per gallon or per liter of gasoline than these oil companies are than the owners of the gas stations are that is something that is not talked about what is also not talked about is how governments through these national oil companies own the majority of oil and natural gas reserves and they're the ones that cannot efficiently increase oil and natural gas production that's the main reason why we have supply problems not because chevron and Exxon Mobil are evil and greedy it's because the majority of the world's oil and natural gas reserves I think it's 70 or more are owned by governments through these national oil companies and they're the ones that are not efficiently run they're the ones that have too much debt they're the ones with the politicians bureaucrats people in the military that are raping and pillaging the resources the cash the assets of these national oil companies and stealing more and more for themselves and that's why these national oil companies cannot increase oil and natural gas production so you're probably going to see even if the real economy gets worse even if the fed actually does increase interest rates in march by a quarter point based on supply and demand fundamentals for oil and for natural gas globally you could potentially see even higher prices for both in the next 6, 12, 18, 24 months because there are major, major supply problems in the long term for both unless demand totally collapses and for natural gas we're actually seeing the opposite during the pandemic according to research I've seen there was actually a six percent increase in electricity demand globally during the pandemic so despite the global economy having problems, despite China shutting down factories, despite shortages of coal in China, of natural gas in China, of shortages of natural gas in the United Kingdom and the European Union electricity usage globally actually increased substantially by six percent so that data point that research actually shows me that natural gas and nuclear power are going to be two major sources of base load electricity in the future if there is a wide scale stock market crash or correction there would be good buy the dip opportunities for oil, natural gas, and uranium plays, because energy demand especially for electricity seems to be increasing especially as more people work from home and remotely they're using even more power they might be using less gasoline to commute but they're using more power more electricity at home than they normally would
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