Actionable Intelligence Alert

The Biden Administration has recently gone hat in hand to Venezuela to try and get more crude oil as gas prices surge.  

This is after demonizing US-based oil producers who are reluctant to raise production as the administration has watched up regulations on American-based oil production.  

Now we have calls for windfall profit taxes on oil companies as Putin not dumb policies is blamed for higher US gasoline prices.

The world's largest exporter of grain (Russia) has invaded the fifth largest exporter of grain (Ukraine). In thirty days the planting should begin in Ukraine for the upcoming crop year.  

That is not going to happen because those areas are the current conflict zone.  

Russia also has advised that it is stopping fertilizer exports.  We have set our food system up so that an interruption like this has the possibility to affected millions of people that are not even involved in this conflict.

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Gold has had a tremendous couple of weeks.  

Is the recent move higher a result of Ukraine-Russia conflict safe-haven seeking. Or is it a move higher in an unloved, weak sentiment area of the market?

Jeff Currie, the closely-followed head of commodities research at Goldman Sachs Group Inc., says he’s never seen commodity markets pricing in the shortages they are right now.  

"I've been doing this for 30 years and I've never seen markets like this," Currie said in a Bloomberg TV interview. "This is a molecule crisis. We're out of everything, I don’t care if it’s oil, gas, coal, copper, aluminum, you name it we’re out of it."

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Chronic underinvestment in all resources especially oil and gas is leading to a situation where prices will have to move higher for an extended time period in order to incentivize new investment.  

However, this is being hindered by poor policies and policies that are opposed to the extraction of minerals and resources that will be needed to facilitate the build back better plans of governments.  

Regardless of the reasons, this will lead to speculative and investing opportunities for astute market participants.

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Last week (SLB) reported an upswing in the oil field services sector. This week the Halliburton CEO confirmed what we were forecasting, a sustained upswing in the oilfield services business.

As we have discussed in previous videos, I believe the biggest catalyst for higher oil prices this year is the coming market realization that OPEC+ will not be able to meet the call for supply.  

As the pandemic recedes and oil demand not only equals but exceeds pre-pandemic levels it will become apparent that there is not enough oil to supply the world's demand. This will result in oil prices above $100/bbl.

Energy has burst out of the gate up around 15% already this year continuing the outperformance we saw in 2021.   

Will it continue? Many of our stocks had a nice move Friday as I believe investors are getting long as the realization of near-record or record cashflows begins to set in on investor's radar.

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High energy prices have allegedly kicked off a revolution in Kazahkstan as unrest continues.  

Kazatomprom has issued a press release that their operations are at a high risk of interruption.   

What does this mean in an already undersupplied uranium market?

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Saying you are going to increase production and actually doing it are two separate issues.  

Will 2022 be the year that OPEC+ gets exposed for its inability to increase production?