Eric Nuttall

…attention is shifting to longer-term issues like Canadian pipeline capacity. Albert, of course, now unveiled that proposal for a new West Coast export pipeline that could reshape Canada's energy outlook. Joining us now is Eric Nottle, partner and senior portfolio manager at Nine Point Partners. Eric, thanks as always for joining us. You bet. Good to be with you. Let's start with the Middle East, with the Strait of Hormuz. It looks like it's reopened somewhat normal. Oil prices have dropped. We were talking a month ago about how oil prices were high. Now we're talking maybe, are they too low to some people? I think so. And I really think it's a sentiment challenge, and we really have to reflect on where things stand now. Global onshore oil inventories are at their lowest levels on record. That's despite the biggest release in history from strategic stockpiles. The biggest surprise, I would say, has been the behavior of China. If we look at the beginning of the war, let's call it February, March, there are imports of drop by about three and a half million barrels per day. In June alone, they're down almost five million barrels per day. And so it's just a massive, massive drop. That's resulted in 320 million barrels of forfeited imports. And that's equal to about a quarter of all of the shut-in production from Middle East, because Middle East, we've lost roughly 1.2 billion barrels. And so I think the market is overly bearish now. We're looking at exports and confusing that with production. You mentioned the opener, the strait…From: this video · 4 claims mined from it

…low to some people? I think so. And I really think it's a sentiment challenge, and we really have to reflect on where things stand now. Global onshore oil inventories are at their lowest levels on record. That's despite the biggest release in history from strategic stockpiles. The biggest surprise, I would say, has been the behavior of China. If we look at the beginning of the war, let's call it February, March, there are imports of drop by about three and a half million barrels per day. In June alone, they're down almost five million barrels per day. And so it's just a massive, massive drop. That's resulted in 320 million barrels of forfeited imports. And that's equal to about a quarter of all of the shut-in production from Middle East, because Middle East, we've lost roughly 1.2 billion barrels. And so I think the market is overly bearish now. We're looking at exports and confusing that with production. You mentioned the opener, the strait being open. I checked satellite data last night, 10 ships, oil ships, entered into the stra it. Normal activity is 40. And so the biggest, there's two challenges now, or two things that I'm watching. One is, when does China return to the market? Their drop in imports do not represent demand destruction. I think it's been an intentional act to help offset what was going to be a very , very significant price spike and the impact that that would have had on global economies and therefore Chinese consumers. The second thing I'm watching is still shut-in production. We are not back to normal.…From: this video · 4 claims mined from it

…We haven't even been able to assess what is the productive capacity challenges in countries like Iraq, which have the crappiest reservoirs combined with a very, very bureaucratic entities that have not been able to respond properly. They're down 2.4 million barrels per day as we speak. And we think there'll be a long-term impact to their production. And so simply put, we think the market is too bearish. We were anticipating a oil price sell- off when the strait eventually began to open. We just didn't think it would be from 90 to 68. We thought we would be in the 120s to 140s. When you look at where should oil price be, forget what I think, I'll reference energy aspects, which is a globally respected energy analytical firm. They think that Brent should be at roughly $130 to $140 today, given where inventories stand. Wow. And we're not even close to that. But China, you say they feel like they pull back and are sitting. What happens when they come back in and come back in with a vengeance? That is the one huge thing that we're all watching and waiting for. And so if Chinese demand truly did not fall, when I say demand, road traffic, petrochemicals, et cetera, there's no indicators of meaningful drop in demand. And so the oils had to come from somewhere. And a real challenge with the oil market is we have visible stocks, things that we can see with satellites. They pull up the data every morning, but there's a large amount of invisible stocks.…From: this video · 4 claims mined from it

…Yeah, it's a very important question that you ask, because when we think about just the restocking of what's been drawn, by our math, that's roughly 450,000 barrels per day of new demand every day for the next three years just to restock. And we've seen news coming out of countries like India, where I think they're adding a new SPR of 50 million barrels. So there's really a renewed focus on security of supply. It really portends well for Canada. So I think that, again, the market just wants to be bearish right now. It fits the narrative for the broader NASDAQ stocks hitting all time highs, et cetera. Everybody's going to sit in here, and the energy crisis that we are in is not over. The straight over moves is not open. Traffic has not returned to normal. We're down 8.6 million barrels per day of production, and we're hurtling towards the wall unless things radically improve soon. Okay. We have to wrap it up there, Eric, but thank you as always. My pleasure. Eric Nettl, partner and senior portfolio manager at Nine Point Partners.…From: this video · 4 claims mined from it