Videos Of The Week
A Couple Quick Thoughts On Geopolitics And Oil & Two Videos Worth Watching
Things are moving quickly in Europe right now, and it’s hard to keep up with everything going on. Russia is in the driver’s seat as things stand right now after pushing Ukraine out of the Kursk region, and the recent ceasefire proposal was rejected by Putin. We will see what happens from here, but the Russians remember what happened last time there was a ceasefire, which gave the West time to rearm Ukraine. From Russia’s point of view, if western politicians (and their puppet Zelensky) are “agreement incapable”, as some have opined, why would they give up their advantage? I think Trump is trying to figure out the best way to get out of a sticky situation created by the previous administration, but there are a lot of powerful factions across the West that have conflicting interests in Ukraine.
We also had news that Trump is going to use “overwhelming lethal force” with airstrikes on the Houthis in Yemen. We will see if this is more effective than recent attempts to mitigate the impact the Houthis have had on shipping through the Red Sea. It will be interesting to keep an eye on, but if you want to stay up to date on the latest geopolitical events, I’ll point readers again to Mark Wauck’s Meaning In History Substack. I have linked his recent post on the recent announcement from Trump regarding Yemen below.
This section will be a brief follow up to my longer rant last week on oil, but I think it’s worth paying attention when you start to see headlines and data points that are against the prevailing narrative. I have repeatedly said that I’m skeptical of “drill, baby, drill” at $70 a barrel with current costs. If oil heads significantly lower, the only thing the Administration will be drilling if oil is at $50 is the headlines. In all seriousness, if we do get a recession and a trip into the $50s, I think it will be short lived due to what is going on in with companies in the Permian as far as their rising costs, production getting gassier, and several other factors. They say low prices are the cure for low prices, but I think it is interesting to see what Scott Sheffield, the former CEO of Pioneer Natural Resources, had to say about Permian inventory on his recent CNBC interview. It’s definitely food for thought for when we might get the second wave of this oil cycle, but I think it’s a matter of when, not if.
Is there much more room to grow oil production in the US?
One of the main reasons that Pioneer sold, we had a choice, I felt like we had to diversify. We were running out of tier 1 inventory, everybody’s running out of tier 1 inventory. Pioneer is going to run out of tier 1 inventory by 2028, and tier 2 will be gone by 2032.
John Polomny’s AIA Weekly Recap
This video is a good follow up to what I was saying above on oil. Sheffield wasn’t along among notable executives talking about the problems that the US might have growing oil production. Harold Hamm, of Continental Resources, said recently that drillers need $80 a barrel to cover costs at some wells. John also covered other things like sentiment and inventories that show why oil is a very interesting contrarian play right now. It wasn’t just focused on oil. He went over US steel production, shipbuilding capacity, and debt levels, among other issues the US is facing currently. He also touched on the political turmoil in Europe that could be an issue in coming years. John’s weekly updates are a must watch for anyone interested in commodities, or any other opportunities that might be out of favor.
Blood Satellite w/ Stormy Waters & Tom Luongo
If you’re interested in the global financial system or geopolitics, you will enjoy this podcast. They talk about the European banking system, what is going on in Ukraine, and why gold is still flowing out of Europe and into the US. Gold backed treasuries were another topic of conversation, but I think we could see a lot of changes to the financial system in coming years. Things will probably continue to move rapidly on the geopolitical front, and if you think Europe is in a precarious position right now like I do, this video might be thought provoking.