RE:RE:RE:Snow, just curiousI appreciate the question. While I suspect demand will outpace supply (regardless of the EIA's opinion) I have not (and do not feel like I could) quantify what a recession would do to oil or related equities.
Seems reasonable enough to suggest some demand destruction would play out despite a tight market. So the price of oil will be impacted to the downside (as we have seen already) because I believe we are already in a recession and the markets have re-evaluated the discounted CF's based on rising yields and slowing growth. And risk must be priced in to oil equities which are also subject to inflation and higher interest rates despite higher oil prices.
Equities are risky assets. Especially when introducing macro uncertainty. People/markets do not always appear rational so I would forecast a volatile environment where we could see depressed oil stock prices with sudden spikes (maybe near Q earnings releases). *depressed meaning lower than the 52 week highs we've already experienced. But who knows we could also put in new highs as the FED story may change.
But It seems prudent to plan for a deep/dark recession given all this chatter aouround a potential soft landing. Unlikely imo.
BayStreetWolfTO wrote: What are your thoughts on the demand dent of a recession given the "great recession" dented by a couple %. Do you think the EIA and EIA are right that even with a recession demand outpaces supply? I know you have been reading quite a bit on recession fears...have you quantified what that is from your perspective?
Snowballer wrote: Same as most, same as I've been saying for years based on $80 to $100 WTI: $12 -$14
I agree with your assessment of $24 in 2023 and higher if we are in a multi-year bull market. But a recession could completely derail these targets and/or policy risk around energy.
BayStreetWolfTO wrote: Since you know all the financial numbers as well what is your upside target for BTE. I get your downside but what are you on the upside?