Energy Prospectus

Israel made an important announcement this morning. They said that Iran is preparing its citizens to expect a new agreement with the Biden administration to be signed shortly. Right now there are two impediments to signing, both of which are deal-breakers for the US. Israel expects Iran to reluctantly accept the conditions. Israel has the best intelligence in the world, so if this is their prediction, the odds are that it will happen.
HFIR, an energy author on SA who I think knows his stuff, just the other day wrote that if Iran/USA sign the deal, the knee-jerk reaction could knock oil down to $80. Later, closing the valves on the SOR, and the subsequent new sanctions on Russia could once again bring the price up to $90.
I assume most subscribers to the EPG are buy and hold investors, so I don't know if this info is meaningful to you, but for those of us who have been trading more than holding, I think this may be important info.

Thanks for the post.
> It is hard to tell how much of the new "Give Iran a Nuke" deal is already priced into Brent and WTI.
> If oil prices do move back to $80/bbl I think they will rebound quickly because even if the U.S. lifts all sanctions against Iran, the country will not be able to quickly add more production to the market. The logistics of moving a million bpd is difficult to work out.
> It is also my guess that Iran has been selling a lot of oil anyway. They control Iraq, so they may just be smuggling it out thru Basra.

This is just one of many "noises" that are keeping a lid on oil prices.

Something else to keep in mind that most of the companies in our Sweet 16 and Small-Cap Growth Portfolios are not selling their oil this year for realized prices net of the cash payments on their hedges over $80/bbl anyway. For example, if you look at the updated forecast model for Laredo Petroleum that I updated on 8-16-2022, even if WTI averages $100 in Q3 and $105 in Q4, Laredo's realized oil price will only be $72.52/bbl. Even at that oil price, the Company is having a fantastic year.

Also, higher natural gas price and NGL prices are going to offset most of the impact from a dip in oil prices.