Josef Schachter, Founder and Editor of the Schachter Energy Report, joins us to review the volatility in energy sector and the recent surge to new highs in crude oil. Josef considers this move higher to be simply the geopolitical “war premium” on the potential of Russia invading Ukraine and the potential response and sanctions that will come from the US and Europe. We also review whether some of the pricing strength may actually be OPEC+ countries capacity issues, along with chronic underinvestment in new development.
The conversation then turns towards the inflation theme and the trend of global central bank tightening cycles into slowing growth estimates and how this may turn from a stagflationary environment into a moderate recession. Josef still considers the backdrop relatively bearish for the oil market for the balance of 2022 with “a lot of air” underneath current price levels.
We wrap up with thoughts on the oil and gas companies and he is more constructive on the natural gas sector, consider his more bearish outlook on oil and the oil stocks overall, but does see some opportunity in companies that have hedge books rolling off that will have increased margin expansion.
- In the early part of the audio we were having a slight connection issue that affected Josef’s audio quality but it greatly improves as the interview progresses and we felt the information was important to share even though it gets a bit choppy in spots.
Click here to visit the Schachter Energy Report website to learn more about Josef’s reports.