You have to give at least a little credibility to the idea that the US hit Iran fully expecting it to close Hormuz, thereby driving up the value of America's oil and LNG. I'm not saying it was the only reason Trump started the war, but can't you just imagine his eyes lighting up when the planners told him that.
Keep in mind that while the US produces a very large amount of oil it comes at a high marginal cost, much higher than what it costs to extract in the Gulf and Russia. At the pre-war price of $60/bbl, US producers are sucking wind. At $90/bbl, US oil extraction is profitable.
OPEC+ kept its oil flowing and the price relatively low, which hurt the US. That's reversed now, and I can easily see Washington being quite pleased about it.
I do believe you give WAY too much credits to the admin to account for secondary (or ternary) effects. I mean, they couldn't even get the interceptor math right...
Well I don't want to give the impression that I have a high opinion of Trump and his gang. In this instance the idea might not come from his administration, but from the oil and gas industry in the US. Unless you feel they're not the kind of folk to seek profit from a war.
The present and recent past majority of USA gas/oil plays are ridiculously low EROEI, around 5 or 6 to 1. Further, they require immense quantities of (expensive!) diesel fuel to construct but produce nearly all (cheaper!) LIGHT fractions- gasoline, naptha, natural gas.
In fact, some have compared the USA fracking plays to a giant mechanism to convert diesel fuel to gasoline & natural gas while treading water economically.
These factors have a lot to do with the desire to take control of the heavy oil from Venezuela to ensure access to plenty of diesel and then force prices for our fracked well sourced crude, refined gasoline, naptha + other light crude sourced petroleum products & LNG exported from USA as high as possible by ELIMINATING WEST ASIAN COMPETITION.
Perhaps, but it is important to note that re-configuring a viable percentage of the refineries output capabilities to handle the heavier, sour (higher sulfer content) crude from Venezuela takes both time and capital. Hydrocarbon refining is not an agile industry, and retooling to handle inputs that were not previously anticipated, in volumes that will have a measurable effect on total supply, in non-trivial.
Billy, that is actually positive (thank you for the clarification) but from a numbers perspective, what % of the total domestic refining capacity can handle it? Prior to last week, I would argue that most of the refining capacity in CONUS is geared towards sweet, light crude from the Gulf. Or, in some limited cases, light shale (which may become viable with the recent jump in WTI and Brent).
I was not arguing that -no- American refineries could handle it. Just that turning off the spigot of sweet light from the gulf will essentially mean that all the refineries used to plentiful sweet light have to make the decision to either retool for sour heavy, or roll the dice that inputs from the gulf will miraculously resume. It is a very unenviable position.
Refineries with large delayed coker units are the ones designed for refining oils like Venezuelan and Canadian very heavy/tar sands materials. Please note: those are MOSTLY ON THE GULF COAST (there is one in IL and another in KS), we built those to handle imported oil! This is why we are moving a large % of Canadian heavy oil by train & pipeline all the way from Alberta to TX and LA...
The USA IMPORTS those heavy oils (from Canada, Venezuela and a bit from Mexico) to refine here at maximum profit and EXPORTS much of our fracked light gasoil crude (less profitable!) to other countries. The heavy materials which provide diesel, jet fuel and lubricants are way more profitable to refine-
More complex than just that obvious desire to sell USA petroleum/petrochemicals for higher prices.
The apparently insane amounts squandered in USA on the financing of drilling thousands of (real world uneconomical, very short life span) fracked gas/oil wells risked collapsing the issuing institutions & energy company stock prices, causing financial panics & etc. is another burden that driving West Asian petroleum & LNG availability down/USA petroleum & LNG prices up addresses.
Then there is the desire by The West to either control or damage Chinese economy, also achievable by eliminating and/or controlling their access to West Asian resources.
Finally, this whole dislocation will degrade targeted areas economies, slow or stop population growth & ability to use their resources "in country", causing previously developing (& consuming their resources at home) countries to leave natural resources in the ground for USA to snaffle off later, forcing them back towards their old status as cheap providers of resources & buyers of others manufactured goods.
Also, the ownership class of "the West" mostly despise those funny looking & talking brown people. And now that they are investing in robots & AI to take care of less skilled work? They don't need to keep so many of them alive for labor and so consider reducing their numbers a good thing (as long as the desirable natural resources they are living on top of don't get to radioactive in the process, of course!)
Of course, there is the cynical performative catering to a couple of countries “God botherer” voting bases in the mix too, those in charge mostly aren't believers in anything but their own power, money and superiority.
Anything else is a matter of personal preference and risk tolerance. I provide a precious-metal angle to this question, but besides the 3 abovementioned points, there is a world of possibilities out there. None more or less worth than the other. Focus on something that you know very well, it'll make your journey easier as you'll have background in it.
I relished the first two links, and went mouth agape, drooling with dumbfoundment, at the third one. I'm the son of a private investor, but he was a bad dad, so I shunned all things financial literacy and stocks, partly out of spite. I can tell you intimately, comprehensively know your shit, but I can't translate your shit-knowledge into practical investment or money management advice without feeling like I'm starting to get a nosebleed. Is there a "explain it like I'm 5" version?
- if you ever decide to buy precious metals, buy the simplest, most recognizable stuff with the lowest markup. And don't buy because everyone else is buying.
That's honestly the whole thing. Everything else is details and personal preference.
The only thing I really want to leave you with: be careful with anyone who claims to have the all-round answer or a system that "just works". If it sounds too easy, someone's selling you something. Take your time, read at your own pace. There's no rush.
LNG is where the gulf coast has made its major investments…almost war predictable. Many opportunities in both US and Canada.
You have to give at least a little credibility to the idea that the US hit Iran fully expecting it to close Hormuz, thereby driving up the value of America's oil and LNG. I'm not saying it was the only reason Trump started the war, but can't you just imagine his eyes lighting up when the planners told him that.
Keep in mind that while the US produces a very large amount of oil it comes at a high marginal cost, much higher than what it costs to extract in the Gulf and Russia. At the pre-war price of $60/bbl, US producers are sucking wind. At $90/bbl, US oil extraction is profitable.
OPEC+ kept its oil flowing and the price relatively low, which hurt the US. That's reversed now, and I can easily see Washington being quite pleased about it.
I do believe you give WAY too much credits to the admin to account for secondary (or ternary) effects. I mean, they couldn't even get the interceptor math right...
Second- and third-order effects, and the ability to anticipate same, are the difference between a bad checkers player, and a good chess player.
Well I don't want to give the impression that I have a high opinion of Trump and his gang. In this instance the idea might not come from his administration, but from the oil and gas industry in the US. Unless you feel they're not the kind of folk to seek profit from a war.
No, that is indeed a distinct possibility. And don't forget the banksters.
The present and recent past majority of USA gas/oil plays are ridiculously low EROEI, around 5 or 6 to 1. Further, they require immense quantities of (expensive!) diesel fuel to construct but produce nearly all (cheaper!) LIGHT fractions- gasoline, naptha, natural gas.
In fact, some have compared the USA fracking plays to a giant mechanism to convert diesel fuel to gasoline & natural gas while treading water economically.
These factors have a lot to do with the desire to take control of the heavy oil from Venezuela to ensure access to plenty of diesel and then force prices for our fracked well sourced crude, refined gasoline, naptha + other light crude sourced petroleum products & LNG exported from USA as high as possible by ELIMINATING WEST ASIAN COMPETITION.
Perhaps, but it is important to note that re-configuring a viable percentage of the refineries output capabilities to handle the heavier, sour (higher sulfer content) crude from Venezuela takes both time and capital. Hydrocarbon refining is not an agile industry, and retooling to handle inputs that were not previously anticipated, in volumes that will have a measurable effect on total supply, in non-trivial.
Several of our largest Gulf Coast refineries were BUILT to handle that Venezuelan crude!
Billy, that is actually positive (thank you for the clarification) but from a numbers perspective, what % of the total domestic refining capacity can handle it? Prior to last week, I would argue that most of the refining capacity in CONUS is geared towards sweet, light crude from the Gulf. Or, in some limited cases, light shale (which may become viable with the recent jump in WTI and Brent).
I was not arguing that -no- American refineries could handle it. Just that turning off the spigot of sweet light from the gulf will essentially mean that all the refineries used to plentiful sweet light have to make the decision to either retool for sour heavy, or roll the dice that inputs from the gulf will miraculously resume. It is a very unenviable position.
Refineries with large delayed coker units are the ones designed for refining oils like Venezuelan and Canadian very heavy/tar sands materials. Please note: those are MOSTLY ON THE GULF COAST (there is one in IL and another in KS), we built those to handle imported oil! This is why we are moving a large % of Canadian heavy oil by train & pipeline all the way from Alberta to TX and LA...
The USA IMPORTS those heavy oils (from Canada, Venezuela and a bit from Mexico) to refine here at maximum profit and EXPORTS much of our fracked light gasoil crude (less profitable!) to other countries. The heavy materials which provide diesel, jet fuel and lubricants are way more profitable to refine-
Indeed! Good logical take. So again, war for oil prices?
@nobody
More complex than just that obvious desire to sell USA petroleum/petrochemicals for higher prices.
The apparently insane amounts squandered in USA on the financing of drilling thousands of (real world uneconomical, very short life span) fracked gas/oil wells risked collapsing the issuing institutions & energy company stock prices, causing financial panics & etc. is another burden that driving West Asian petroleum & LNG availability down/USA petroleum & LNG prices up addresses.
Then there is the desire by The West to either control or damage Chinese economy, also achievable by eliminating and/or controlling their access to West Asian resources.
Finally, this whole dislocation will degrade targeted areas economies, slow or stop population growth & ability to use their resources "in country", causing previously developing (& consuming their resources at home) countries to leave natural resources in the ground for USA to snaffle off later, forcing them back towards their old status as cheap providers of resources & buyers of others manufactured goods.
Also, the ownership class of "the West" mostly despise those funny looking & talking brown people. And now that they are investing in robots & AI to take care of less skilled work? They don't need to keep so many of them alive for labor and so consider reducing their numbers a good thing (as long as the desirable natural resources they are living on top of don't get to radioactive in the process, of course!)
Of course, there is the cynical performative catering to a couple of countries “God botherer” voting bases in the mix too, those in charge mostly aren't believers in anything but their own power, money and superiority.
Interesting comment, thanks.
Tiintin nails it!
;-)
I'm guardedly interested in asking your investment advice for absolute dummies, such as myself
What I give as advice is mostly these:
1. https://no01.substack.com/p/what-is-true-wealth
2. https://no01.substack.com/p/breaking-out-of-the-debt-trap
3. https://no01.substack.com/p/what-physical-should-i-buy
Anything else is a matter of personal preference and risk tolerance. I provide a precious-metal angle to this question, but besides the 3 abovementioned points, there is a world of possibilities out there. None more or less worth than the other. Focus on something that you know very well, it'll make your journey easier as you'll have background in it.
I relished the first two links, and went mouth agape, drooling with dumbfoundment, at the third one. I'm the son of a private investor, but he was a bad dad, so I shunned all things financial literacy and stocks, partly out of spite. I can tell you intimately, comprehensively know your shit, but I can't translate your shit-knowledge into practical investment or money management advice without feeling like I'm starting to get a nosebleed. Is there a "explain it like I'm 5" version?
There's no shortcut, unfortunately 😁
- wealth isn't money alone
- get out of debt first
- if you ever decide to buy precious metals, buy the simplest, most recognizable stuff with the lowest markup. And don't buy because everyone else is buying.
That's honestly the whole thing. Everything else is details and personal preference.
The only thing I really want to leave you with: be careful with anyone who claims to have the all-round answer or a system that "just works". If it sounds too easy, someone's selling you something. Take your time, read at your own pace. There's no rush.