Post by
Experienced on Jan 21, 2022 11:28pm
Speciallygood
Before addressing your response to my post, I would like to thank NP and especially Obscure for their posts. Obscure, your discussion of GS and the others in the "Investment Business" are accurate. I know because I was one of them at one time.
Speciallygood, I would like to apologize to you for my somewhat rude and flippant response to your post. You deserve better.
My response to your post wasn't so much that I know better than the person who wrote the article that you referenced, but I saw it as classic example that I saw so many times in my past life where a straw man is created. That straw man is then used to create a scenario which may turn out to be true but at the time it is written has no basis in actual fact or more importantly is not backed up by any facts or even a plausible explanantion of how it could happen. The scenario is then used as Obscure pointed out to create a certain impression which in turn encourages actions by the readers from which the firm can benefit and often results in the reader (client) losing money.
I don't know what Putin is thinking or whether he will decide to invade The Ukraine. I must admit that my knowledge of that part of the world is such that I view an invasion by Russia, at least beyond the Donbass, as highly unlikely. The reasons for that are lengthy and are for another time.
Irrespective of whether Russia does or does not invade The Ukraine, the question investors in SU need to assess is whether that action would result in an increase in the price of oil due to a supply shock.
To answer that question, people need to think about how a supply shock would happen.
Would it happen because OPEC decided to cut production because of the invasion?
Would SU and other Canadian oil producers cut production because of the invasion?
Would US frackers cut production because of the invasion?
Would Russia itself cut production because of the invasion?
If the answer to any of these questions is yes, then perhaps the price of oil will go up. If the answer to all four questions is no then the price of oil is unlikely to go up due to an invasion.
There was a time long ago that the price of oil did go up simply due to a conflict somewhere in the world but those days are long gone and people are generally more sophisticated than the "old days" and shrug these things off unless there truly is a supply or demand shock resulting from the conflict.
Comment by
delissio on Jan 22, 2022 12:12am
Experienced, I have followed your posts for a while on this board and .... hats off to you, you have my highest respect. Many thanks for sharing your thoughts and ideas. The question about the possible war - is there a possibility of the oil price impact due to the international sanctions on Russia. Thank you.