RE:RE:The Chess Game ContinuesNPCexe wrote: Don't forget Iran is looking over a final draft of the proposal. Deal is imminent but everyone is focused on Russia. Might catch market by surprise and further drop the oil price. I sold some SU and ENB on Friday for some peace of mind. Not liking this uncertainty. Nobody predicted any of this yet the oil stocks have given us a chance to pop smoke if we needed to.
Experienced wrote: Putin's invasion of The Ukraine so far has not been full throated. The popular press narrative is that the Russian are being held back by the Ukrainian military. The Russians send some missles into Kviv at night and then do nothing the rest of the day. I very much doubt that this restraint is due to the Russians being held back by the Ukrainians.
In another channel, the Ukrainians and the Russians are negotiating a location to have peace talks with the Ukrainians rejecting an offer from the Russians to meet in Minsk and suggesting Israel.
While this is going on, The West has imposed a bunch of toothless sanctions on Russia and making a lot of noise in their media that they are stangling Russia with these sanctions while anybody who really knows international business knows that it is just that - noise.
So what is really going on?
Putin knows that even if he were to take the Ukrainian capital and install a puppet President that the Ukrainian people and the military would still fight the Russians which is an intenable position for the Russians and one that they would inevitably lose after a costly and lengthy guerrila war.
The Ukrainian President despite his bravado doesn't want to die nor does he want to have the blood of thousands of Ukrainians on his hands and see the physical destruction of his country and its beautiful cities.
All Russia really wants is a neutral Ukraine and a country where Russia has some influence and also security for the Russian Ukrainians.
So Putin is trying to do just enough militarily to get Ukraine to declare that it will not seek NATO membership.
If these peace talks go forward the only real thing that the Ukrainians can offer is a commitment to put their aspirations for NATO off the table in return for a withdrawal of Russian forces from the country and for Russia to leave them alone.
If this were to happen, how would the market react?
I see from my experience a couple of things. First the market will pop, celebrating the peace deal. Second oil prices will go down.
Let's deal with the first one.
As I have mentioned before, nothing going on in terms of the invasion or the 'sanctions" for that matter have any real effect on the world economy and particularly The West. So if the market does "celebrate" a peace deal it is nothing more than a sucker punch to get the lemmings to buy in while the trading floors on Wall Street happily sell into this false narrative. Smart investors will use this opportunity to mimic these trading floors and seal in some profits before the market "realizes" that peace in the Ukraine has no impact on the profitability of US companies.
Now - the second one
I see resolution of the Ukrainian situation to have a more lasting impact on oil prices in a downward direction. The invasion by Russia has highlighted the vulnerability of The West to have effective tools to non militarily push against future agression by Russia and China. This will likely result in a change in the world energy market and lead to more production and international transport of natural gas, at the expense of oil. If I am right about this then this is not good news for holders of oil production companies.
Yes agree about Iran. If that deal is inked then we can expect an additional and immediate increase in world oil supply of 1-1.5 million barrels a day. I would expect that part of the cash in the deal will not only fund the Iranian nuclear program but also fund additional oil production in Iran which is literally sitting on hundreds of years of conventional proven oil reserves.
As for ENB, I am not so sure about that one. ENB's acquisition of Ingelside in Texas gives them a huge oil and gas port capable of efficiently handling two supertankers at a time and there is enough room to build a third loading dock. If the US does move to being serious about sending more LNG to Europe then ENB will be a big beneficiary of this.