Notes from Keith Kohl - Sept 6

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Keith publishes the monthly "Energy Investor" newsletter.

All Eyes on Iran for Oil Price Sell-Off

Although our primary focus is on the supply/demand fundamentals in oil, short-term prices could easily slide further as talks with Iran are reportedly nearing a deal.

However, I’m not entirely convinced that this is the silver bullet the world is expecting.

Essentially, what this means initially is that Iran can stop selling the oil it's been sliding under the table to China and instead sell up to 2 million barrels per day on the global market. Moreover, we now hear word from OPEC that members are considering a production cut if the deal goes through and more Iranian crude is exported. < Keep in mind that even if Old Joe Biden and the Supreme Leader of Iran agree on a deal, the U.S. Congress still needs to approve the deal. It will take months for more Iranian oil to hit the market even if congress approve it.

While most investors believe oil’s long summer of profits may be coming to an end now that Labor Day is officially behind us, I wouldn’t be too quick to jump on the bearish bandwagon that’s calling for crude to crash below $60 per barrel.

THIS Is What an Energy Crisis Looks Like

When you think of what an “energy crisis” truly is, what’s the first thing that comes to mind? Is it never-ending lines at the gas station? Or perhaps sitting in a cold, dark home as winter sets in?

However, there are some very explosive effects that most people ignore. Right now in Germany, manufacturers are starting to halt production due to the insane cost of energy.

We’re not talking about idling some production for a few hours to cut a few euros off the power bill but rather the cessation of production altogether.

It’s a foreboding signal that a deeper recession awaits Germany in the months ahead as the country continues to struggle to secure natural gas supplies before winter, when demand is seasonally at its highest.