Energy Prospectus

Piper Sandler 6/29/2022: The Flowing Oil Data Digest: 2H Will Be About Escalating Tension & Bad Choices

The West’s policy makers succeed at finding only most-bad options:
> Faced with an acute energy crisis, G-7 & EU leaders take away more supply (EU embargo)
> Invite deep recessions to curb demand
> Discourage domestic supply responses to preserve a failing energy transition

As the EU embargo approaches we expect:
> Steeper discounts on Russian crude
> Reversal of the recent (slight) deflation in diesel margins
> We can now say with greater confidence that our $130/b Brent forecast looks conservative

Our outlook: volatile and sharply rising prices

Jan Stuart, Global Energy Economist, 646 517-1334, Energy@psc.com
Thomas Marchetti, Global Energy Strategist, 646 517-1335, energy2@psc.com
James Noonan, 646 517-1337, james.noonan@psc.com
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MY TAKE: This world runs on oil and all the fairy dust / hopes & dreams of the Climate Change Wackos will not change that. OECD Petroleum Inventories keep falling and that cannot continue. Higher oil prices will go up as OECD inventories go down.

The current Administration finds the exact wrong course of action on many decisions.
That is hard to do! If you flip a coin you would be right 50 % of the time.

For the reasons you point out I'm long and will remain long