Josef Schachter – Geopolitical War Premium And Capacity Issues Drive Recent Highs in Oil and Natural Gas
Josef Schachter, Founder and Editor of the Schachter Energy Report, joins us to review the volatility in energy sector and the recent surge to new highs in crude oil. Josef considers this move higher to be simply the geopolitical “war premium” on the potential of Russia invading Ukraine and the potential response and sanctions that will come from the US and Europe. We also review whether some of the pricing strength may actually be OPEC+ countries capacity issues, along with chronic underinvestment in new development.
The conversation then turns towards the inflation theme and the trend of global central bank tightening cycles into slowing growth estimates and how this may turn from a stagflationary environment into a moderate recession. Josef still considers the backdrop relatively bearish for the oil market for the balance of 2022 with “a lot of air” underneath current price levels.
We wrap up with thoughts on the oil and gas companies and he is more constructive on the natural gas sector, consider his more bearish outlook on oil and the oil stocks overall, but does see some opportunity in companies that have hedge books rolling off that will have increased margin expansion.
- In the early part of the audio we were having a slight connection issue that affected Josef’s audio quality but it greatly improves as the interview progresses and we felt the information was important to share even though it gets a bit choppy in spots.
Click here to visit the Schachter Energy Report website to learn more about Josef’s reports.
I love a good RANT………………… Not all gurus know what they are doing…… besides flapping their lips….
Oil is for big boys, that know what the heck political issues are and are going to be…….
Oil is not going away, as everyone thinks….. How else is the US CON, ..petro dollar going to stay in control,…… LOL……….. All ONE BIG GAME…….. everyone is guessing…….JMO
I don’t think anyone can predict Q1 outcomes with certainty…
The EUR would rise if fears caused market selling in Europe then demand for cash would rise.
Yet SWIFT payments under sanction would offset demand for EUR and other currencies.
How much and by when? Nobody knows..
USD:EUR/USD:CAD/EUR:CAD
France? Germany? USD?
USD is 1.26 more than CAD.
If Nat Gas rise $1 USD then CAD it’s risen $1.26
NAT. GAS is avg 12% of WTI
So if Oil rose to $100 then Nat Gas would hit $12 hypothetically speaking
$6 USD price rise is around $7.50 CDN
But the path of the Sun dictate the demand for gas for heating. We are getting over winter in a few weeks. Demand here will decline as spring arrives.
If gas is $6 in USA then it could hit $12, maybe. If gas is used as feedstock to cook jet fuel, oil gasoline then any rise in commodity price has knock on effect to other fuels in term of mfg costs.
Then demand for $USD for buying GAS goes up … but oil is a bigger influence than gas on USD demand. The Far East has 2 concerns – a falling demand for oil in Europe over sanctions, a desire to hit production quota from declining fields. If they over do it they shoot their own foot.
WTI is $86.. it could fall to 47 or rise to 98 so how do you bet, what if you are wrong?
Brent is $89 same deal..
If other energy costs rise, Bitcoin miners get eaten alive, transaction get expensive and investors leave as prices and service quality fall. The BTC/USD trade doesn’t affect oil directly but USD could rise or fall in Europe as Ukrainian Russia plays out.
Fortune favours the bold but Nat Gas favours the cold and Oil affects price of froth in markets.
I predict that I cannot predict exact how all the above plays out with a degree of certainty of more than 3%. I’m 97% sure something I don’t know that I don’t know will affect I don’t know what for sure by I am not certain when, but I’m okay with the mystery of it all.
JS may be right but he really differs from everybody else I read and hear. While oil may drop a bit nobody I read/follow believes it is headed to 50 US or below. My gut says this summer is gonna be a big travel time. I’m vaxed, boosted, ready for shot 4 and have a ton of vacation time saved up so I see a few trips this coming summer. My old and beloved Bronco drinks premium like a drunken sailor so I know I’ll do my part to drain those reserves.
I warned you all when Josef first appeared on KER. I told you to look him up on Twitter and his consistently wrong oil calls and how O&G community views him there. I was laughed at. And yet KER continues to bring him on. Enjoy the theatre of absurdity then.
I took discount to your newsletter in March of 2022 you offered to people from ker.
Your newsletter had everyone sell all oil stocks and remain in cash for sell off, at time oil went up to 40-50 and you expected retest mid 30’s.
Well oil just kept going higher and higher oil was in 60’s by end summer and you kept calling for sell off, oil went up to 70’s and today high 80’s.
I was just a new subscriber looking to get in on oil stocks I was watching but got pulled in by listening to you on this site, well I followed you and never lost money because kept waiting but oil stocks went up big, some 2x, 5x and 10x. I wouldn’t follow you ever again.
All you do is tell people you made big money coming out of bottom in 2020 but everyone you sucked in at end 2020 lost big time.
Your calls on oil for this past year was terrible.
Get lost.