Great set of charts, particularly showing copper and the metals leading the way down in the 2011 - 2014 period and now up (we hope) currently. Maybe one possible explanation for this (other than Dr. Copper's prescience) is that oil's supply is managed by OPEC while there is no comparable supply side cartel for copper. The 2014 crash in oil prices, where oil finally "caught down" with copper was triggered in part by OPEC suddenly unwinding its supply cuts to flood the market to try to recapture market share from shale. The current low price environment is being maintained by OPEC unwinding production cuts (although it is a bit unclear to me why OPEC us choosing to do this). In any event, OPEC's interventions to manage supply, whether restrictive or accommodative, delays the price response compared to copper's more direct transmission of increasing or falling demand into price. Furthermore, there is really no comparable "spare production capacity" in copper (although the market may certainly be in surplus) as it takes much longer to bring meaningful capacity online, particularly compared to short cycle shale production.
Anyway, thanks as always for a thought provoking podcast!
A future Super-Spiked might address the impact that AI and especially AGI could have on expanding future oil supply. Apart from enhanced recovery and more efficient drilling and production operations, this new technology could prove to be the holy grail of exploration--a direct finding tool capable of readily identifying hard-to-find accumulations (strat traps, sub-salt, etc.) and putting to shame the peak oil/Hubbert's Curve logic. Human ingenuity triumphs!
Come on Arjun, any analyst who worked in the oil and gas sector long enough had at least a couple of clunkers or stocks they wished they had never seen on their ledger (Aventine Resources and OGX in your case?).
Great set of charts, particularly showing copper and the metals leading the way down in the 2011 - 2014 period and now up (we hope) currently. Maybe one possible explanation for this (other than Dr. Copper's prescience) is that oil's supply is managed by OPEC while there is no comparable supply side cartel for copper. The 2014 crash in oil prices, where oil finally "caught down" with copper was triggered in part by OPEC suddenly unwinding its supply cuts to flood the market to try to recapture market share from shale. The current low price environment is being maintained by OPEC unwinding production cuts (although it is a bit unclear to me why OPEC us choosing to do this). In any event, OPEC's interventions to manage supply, whether restrictive or accommodative, delays the price response compared to copper's more direct transmission of increasing or falling demand into price. Furthermore, there is really no comparable "spare production capacity" in copper (although the market may certainly be in surplus) as it takes much longer to bring meaningful capacity online, particularly compared to short cycle shale production.
Anyway, thanks as always for a thought provoking podcast!
Thank you Nat! and yes, those were the points I made in video.
Why's OPEC doing it? Pump for Trump maybe?
for sure.
A future Super-Spiked might address the impact that AI and especially AGI could have on expanding future oil supply. Apart from enhanced recovery and more efficient drilling and production operations, this new technology could prove to be the holy grail of exploration--a direct finding tool capable of readily identifying hard-to-find accumulations (strat traps, sub-salt, etc.) and putting to shame the peak oil/Hubbert's Curve logic. Human ingenuity triumphs!
Technology and engineers always win!
Come on Arjun, any analyst who worked in the oil and gas sector long enough had at least a couple of clunkers or stocks they wished they had never seen on their ledger (Aventine Resources and OGX in your case?).
100%! That was the point i was trying to make and am a beneficiary for it. Especially those ethanol names.
Thanks for the transcript, Arjun!
glad you like them!