Real Vision: Finance & Investing #1031 - Will Inflation Send Commodities Higher? with Doomberg | Energy, Semiconductors & China
4 snips
May 7, 2024 
Doomberg, pseudonymous author of the Doomberg Substack newsletter, discusses the impact of recent inflation data on commodities, geopolitical tensions in the Middle East affecting energy markets, and China's ambitions in the semiconductor industry.
AI Snips
Chapters
Transcript
Episode notes
Geopolitical Risk Premium in Oil
- The global primary energy market is largely well supplied except for oil, which carries a significant geopolitical risk premium.
- Oil prices reflect conflict risks in Ukraine and the Middle East, influencing supply risk perceptions rather than physical shortages.
OPEC's Oil Price Management
- Oil prices are highly sensitive to supply changes due to inelastic demand and OPEC's production management.
- Current prices at $70-$90 per barrel reflect OPEC's sweet spot balancing budget needs and economic growth concerns.
US Natural Gas Glut Explained
- In the US, natural gas is in glut, sometimes even priced negatively in production hubs like the Permian Basin.
- Oil and natural gas production linkage causes oil geopolitical premiums to drive natural gas oversupply.