Sweet

Yes, that makes sense. I think we could see a squeeze on demand too.

^ Paywalled for me (yes I’m cheap)

Kup, I’m not sure I agree that the oil market is in as deep trouble as feared. I agree there probably is a deficit globally, but US demand is not mirrored everywhere, and in fact its strength is offset by reduced demand elsewhere. Even in the US demand looks weak, though almost certainly not as weak as the EIA numbers imply (which have just been wrong recently). Woodmackenzie are predicting that demand will have dropped by over a million barrels a day yoy in the coming quarter, largely as a result of China. I’m not saying they are right, I just don’t know. OPEC do in fact have sustainable spare capacity, it’s not much, but it exists. It’s probably lower than they claim, but I’d say it’s at least 1 million barrels a day of sustainable capacity. The biggest problem in the market is a lack of US refinery capacity. Crack spreads for diesel are nearing $60, not sure where they are for other products. That’s keeping lid on crude prices because it’s hurting demand. On China, I have a feeling that there may be something bad lurking there economically, and the covid policy is not sole cause of the poor demand figures. Wouldn’t surprise me if headline ‘zero covid’ policy is being used by the CCP as cover for really bad economic data.

The problem for the EU, and your argument, is that the EU signed up to the Brexit treaty too. In black and white text it sets out the conditions by which unilateral action can be taken. The EU can disagree, but the facts are clear, the trade statistics have already demonstrated that there is a diversion of trade. Brexit: Northern Ireland goods exports to Republic 'reached €4bn in 2021' - BBC News Importantly this diversion of trade will increase substantially should the grace periods for checking goods ends, and the checks the EU wants are implemented in full. That says nothing about the political situation in NI. For all the bad faith from both sides - and to be clear I think both the UK and EU knew this couldn't work from the start btw - the UK has held off from Triggering Article 16 for much longer than they are required to do so under Annex 7. Ironically the UK have actually presented serious proposals to alter the Protocol to make it work, but does the EU want to make it work, or just use it as leverage for something else? I don't know. I also don't know what is the best deal, or who is best placed to deliver it. I just dislike the claims of extremism, I think it's very out of touch with what real extremism is and looks like. Foolish, chancers, liars... sure. Extremists??? No way.

Why the sensationalism? The majority that voted for Brexit are not extremists, and the Tory Party that implemented Brexit was not hijacked. Two post-Brexit PMs, Truss and May, voted remain - are you forgetting that? The Tories have long had a Eurosceptic wing, and in fact so did Labour. Leaving the EU is not an extremist endeavour. The UK joined the European Economic Community but left the European Union. There is a significant difference between the institutions, in scale, in scope and the areas they regulate. At no point from joining in 1973 where the people of the UK consulted about the increasing scope of the European project, not a single treaty change was put to the UK electorate by referendum in 43 years. Should the UK have signed up to a post-Brexit trade agreement that split their country? My view is no, and that it was a mistake. However there were quite different interpretations about how the NI Protocol should be implemented, with the UK side believing it would only impact goods at risk of moving to the Republic of Ireland, and the EU believing that all consignments from GB to NI need checked. That’s quite a gulf. There are problems with the NI Protocol, every side admits that now. Let me repeat, every side, including the EU, agree the NI Protocol has problems. The flow and approval of medicines in the UK as part of the health service was under threat, and an agreement had to be reached between the EU and UK to resolve this. The fixes, and grace periods, and offers of reduced checks by the EU are proof there are issues because none would be required if the Protocol was working well. The safeguards to the Northern Ireland Protocol, the infamous Article 16, says that the UK or the EU can take unilateral action for a number of reasons. It states that: "If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade, the Union or the United Kingdom may unilaterally take appropriate safeguard measures. Such safeguard measures shall be restricted with regard to their scope and duration to what is strictly necessary in order to remedy the situation. Priority shall be given to such measures as will least disturb the functioning of this Protocol." We have diversion of trade between GB and NI - fact. We have societal unrest in NI - the devolved government in Northern Ireland has collapsed because of the Protocol - fact. The conditions for triggering Article 16 have therefore been met. Unilateral action by the UK government is entirely in keeping with the Brexit Agreement and the safeguards therein. Not very many people understand this, because they haven't actually read the NI Protocol.

Let’s not exaggerate about the ‘extremist’ nonsense. Countries change their international relationships regularly, and apply and interpret law it as it suits them. International law is only given effect through domestic legislation in the UK. If a new PM comes along, and they can take a sufficient number of the Parliament with them, they can change international relationships. It’s their right. The NI Protocol, implemented as part of the Brexit trade deal, is in many respects unworkable. It’s also unique in that it puts a trade barrier within a country. I can’t imagine very many countries willing to accept that, certainly not the US. It’s takes quite a bit of spin to portray the Tories as extremists - They aren’t. Regarding the finances. We don’t actually know if the fiscal deficit would have increased, the mini-budget was not the full story, cuts in public spending were touted to follow. The messaging was bad, the plan clearly not fully formed, but is that extremism - of course not.

In the UK we don’t elect a Prime Minister, it’s simple, whichever party wins the election forms the government and the leader of that party is the Prime Minister. In some ways it actually a good thing for democracy since are more ways to get a person out of office. Long term the system has been shown to work. In other ways it’s worse because there is a democratic deficit, but we tolerate it for the longer term good. My own opinion is we need a general election, I agree the Conservatives have selected too many leaders. The Tories are a fractious mess and some of them need to be retired and some time in opposition might humble them.

Agree with Spek, don’t think it is wise to have money in China. It could disappear quite easily and I don’t need help losing money Disagree with comments about the US and education. Not everyone needs to be highly educated. I think risk taking and entrepreneurial spirit in the US remains strong and they will remain the innovators and leader in the global economy for decades provided the politics calms down.

IMO biotech is going to be a major growth area, I have a preference for the ETFs since picking biotech companies is mostly like a lottery. I don’t have a position in a Biotech ETF currently but looking to build one. Have an interest in Oxford Nanopore, small British DNA sequencing company that was put on the map by covid. They really have two elements to their business, covid related revenue which is declining rapidly, and everything else life science related where revenue is growing rapidly. Outside of that I think there is a good chance that growth slows dramatically in many companies and maybe the play is high quality dividend or buyback stocks. Although, just as I type that, there is a lot of the world where living standards will rise significant in the next 50 years - 4 billion people… so idk

^ sounds unsustainable.

I like Cramer too. His CNBC interview on the financial crisis is one of the greatest things on television. He also has made his fair share of decent calls. However, there is something uncanny about this timing, he seems to say things near the top and bottoms lol

A useful accompaniment to this thread would be when to sell. I recently read an opinion that was well supported that you should never sell food companies. I noted @dealraker comments about having a few go to zero, but several 100 baggers. You only have to get a few right.

An opinion shared by others, including a couple of famous investors supposedly revered by this board.

Honestly Xerxes, some of what you wrote is a pile of garbage. To imply that I and others and are simply saying Iran and the US don’t get along because Iran is interfering in the region is a deliberate or accidental misreading of what was said. It’s clear than US and Iran’s interests are not aligned, the idealogical differences are great, and there is a history there that makes reconciliation difficult. About that history, and the Western sponsored coup, I’m betting we all know about it. It’s 2022, Wikipedia is free, and what you’re saying is unlikely to be new information to anyone. You obviously have quite a dim view of everyone else’s grasp of history, we aren’t all ignorant and we don’t require the lecture. Yes the US could have made no distinction between the Saudi citizens and Saudi government, but they did, and not just because it was convenient, but because there actually IS a distinction. And btw this is a discussion about energy, perhaps you could go back and reread some of what was argued. That you think energy wasn’t mentioned is proof you didn’t really read it or take the time to understand it.

It's not about being friends though. It's about shovelling money into the pockets of rivals, or in the case of Russia an enemy (I'm European). Russia then turns around and uses that money to buy weapons to fund wars and undermine Europe. It's also about the ability the wage war, and to remove the leverage of Russia (for example) in controlling and influencing our political affairs. The West cannot have critical supply chains reliant on hostile foreign powers. I've also long been against using China as the world's sweat shop for cheap goods. In the West we have funded the rise of a geopolitical competitor unlike any other, that is authoritarian in nature, who not only doesn't share our values but actively undermines them. It's not about the money. Cheap doesn't always mean good. Economic, energy and military security come at a cost. You are advocating that we bargain away strategic advantages for a few bucks. Money isn't everything in life. I personally have no interest in making money by investing in China or Russia.

Many of the 9/11 guys were Saudis, but it was not backed by the Saudi government. Important distinction. Those hijackers were sheltered and aided by the Taliban in Afghanistan. Al Qaeda had an agreement with the Taliban, and received support from Iran in the 90s. The US State Department has Iran as a state sponsor or terrorism and has several publications available online documenting their global terrorist networks and their activities through the middle east and indeed plots on US soil. Contrast that with the Saudis, who have a long-standing relationship with the US to provide energy in return for security. I wouldn't say the Saudis are allies in the same way that the US and UK are, but there has been long standing cooperation there that is meaningful. It doesn't make sense to compare Iran and Saudi Arabia as being similar. They aren't. One is a hostile foreign power with global terrorist networks, the other is not.

One is a friendly pariah state generally, and largest cooperative and responsive to Western interests. One is not and actively seeks to undermine it.

They want to destroy a key Middle Eastern ally - Israel. They have attacked our allies in the region - Saudis - and support rebels in Yemen to attack them. They support and funds a wide range of paramilitary and terrorist grouped which have launched attacks on the West I.e. they are state sponsors of terrorism. Got their noses in Lebanon and Syria and have destabilised those countries. And you can’t understand and why we can’t be friends? Lol

I don’t think you can get rich through diversification. Five to ten stocks IMO.

The West’s approach to weaning itself off fossil fuels forces Middle Eastern oil producers to look for alternative partners. Biden in particular has had scant regard for the interests or concerns of the Saudis and at one point discussed the withholding of important defensive missile systems. Saudis view it as a one sided relationship that can’t be depended on. Biden and his team should have been a bit smarter about this. Saudis are our friends, and it makes sense to have them as allies, even if their leadership is authoritarian. They have until recently worked in a partnership with the West but no more. From a Saudi point of view the cuts today make sense.

It’s not really the oil. It is mostly gas prices, and refined products to a lesser degree. The oil spike was very very temporary. There is something seriously wrong with supply chains, or too much money printed, maybe both that has kicked the fed into gear. Don’t think this current mess has been driven by oil, gas maybe yes. Also curious about what is going on in China, something not right. Tempting to just blame it all on covid but don’t think that’s the full story.

Not nice out there. USD is a wrecking ball. Global macro overshadowing everything. Risk off moves.

agree. Really these stocks should be higher. Everything takes time of course but the energy index is still at near historic lows.

Wheat is really only a big problem for some Middle East and African countries which very often don’t have the land necessary to grow the stuff. Not an issue for most of Europe and North America. Surprising them that many of those countries aren’t more opposed to the invasion.