Rory Johnston, oil buff and founder of CommodityContext.com, returns to Forward Guidance to explain why he is now “cautiously bullish” on the price of oil because of Saudi Arabia’s significant cuts to its production quota. He also shares in details his reading of crack spreads, crude differentials, speculative positioning, and shape of futures curve. Filmed on July 12th, 2023.

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Johnston’s latest Substacks on Commodity Context:

https://www.commoditycontext.com/p/b93afa41-17dc-4d6e-9e75-ea9ca7da95f9

https://www.commoditycontext.com/p/120157df-fe5d-45b5-b19a-ed3a8bab88f7

https://www.commoditycontext.com/p/b93afa41-17dc-4d6e-9e75-ea9ca7da95f9

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Timecodes:

(00:00) Introduction

(00:21) An "Exhausting" Oil Market

(02:59) The Cautious Bull Case For Oil

(11:28) OPEC Cuts Can Support Higher Oil Prices

(24:20) Has The Chinese Re-Opening Been A Flop?

(31:36) Guyana

(34:22) Deconstructing The "Capital Discipline" Narrative About Oil Companies

(49:13) The Russian Supply Question

(54:55) Price Cap

(59:02) Differentials Between Different Types Of Crude Oil

(01:03:10) The Washout Of The Way-Too-Long Oil Bulls

(01:09:02) Futures Curve

(01:15:07) Recession Risk

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.