YouSaid · the spoken record

Tracy Shuchart

lines on the record: 66
first: 2022-07-21
most recent: 2022-07-21
sittings or episodes: 1
sources: podcast

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“Back even stronger. And so I think that's going to be, you know, I think that's the easy, that's the closest example that I can equate this particular market with right now.”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“That Connecticut, California have proposed ideas such as that. So governments are really helping keep demand up if that's what you're really looking for. And the thing is what I look at is that because it's a structural supply deficit across all of these commodities, again, it's not just the energy industry, it's metals mining, agriculture. What I think is going to happen, what we see is the best example that I can kind of relate to right now is that it's kind of in the 1970s, right? Where you had a lot of inflation. Volcker pretty much hiked us into a recession. But the basic fundamentals of the overall markets were an overriding factor. There was a supply problem, right? And that reared its ugly head. And when inflation came back, it came back.”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“First of all, we're not really seeing demand destruction in the United States, which is absolutely the largest consumer in the entire world. We are seeing demand destruction a bit in China because they're still on constant intermittent lockdowns. But what's happening is that why we're not seeing so much demand destruction is we have a lot of emerging markets that are providing a lot of stimulus and a lot of price caps and things of that nature. So that's not really helping the situation if what you're looking for is huge price demand because that kind of ensures that demand keeps going if you have if you're instilling price caps or some kind of incentive such as there's some countries that are giving you a monthly stipend. We even have some states in the United States that have been doing.”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“Turn production off intermittently. That's what we'll have to do. If Russian or if Germany's gas supply gets below 50%, they're willing to basically take however a weak high it is, two weeks high it is. And we're already seeing that with like zinc smelters and things like that again for the last year. And Germany has also said that we're going to try to make sure that this doesn't hit the consumer. And so we're looking for the industrial, the manufacturing sector to basically take the hit if they have to. So, I mean, it'll, you know. We'll have to see what happens this winter.”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it would. And you have to start looking at, you know, we're already seeing manufacturing getting very, very worried in Germany right now. You know, we're seeing a lot of people that are trying to switch from gas to oil as their power source. We're seeing BASF, which is huge petrochemical company basically saying if we have to, you know,”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“And that's 60, you know, that's a lot of natural gas that's priced really high right now. That's a great income. They're getting paid in rubles. So they really, in my opinion, at this juncture don't really have an incentive to turn it off unless things start to escalate again as far as sanctions are concerned. And I could be totally wrong. This is just my initial thoughts on this.”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I think that, you know, I think that. I don't think it's an excuse. Okay, here's, you know, here's what my thought is. My thought is that I don't think they're going to turn off nat gas now, right? Like I don't think, and that part will be easily traceable. It's not like there's not going to be a way bill for it and it's not going to be completely traced and the whole world's going to be watching if this part actually moves to, you know, back to Gazprom. So, you know, that I'm not worried about because that's easily trackable. But I don't think, I know everybody thinks they're not going to turn it back on after these 10 days, but I think if they really want to keep this more as a weapon, they would do that closer to winter. Right. Closer to when they, if they intend to use that as a weapon, right? And perhaps they don't. I mean, you have to think about also, you know, they need the money too, right? They have sanctions. There's a ton of sanctions.”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“And so they were asking for that part back. Russia asked for the part back. Ukraine said, please don't give the part back. So far, you know, it looks like Canada has agreed, the U.S. said we back Canada. You can lift sanctions. You can give this part back. But right now, Russia...”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“Egypt right now. They're also looking to build out their own LNG facility facilities. But those are going to take two to five years realistically to build out. And When you're doing things last minute and say asking for the US for more natural gas, you have to factor in travel times, right? It just doesn't come tomorrow. The theory is right now they are 60% full for winter, which is not as terrible as it was looking a little bit earlier this year. That said, what's happening right now is that Nord Stream 1 is on its regular yearly plans maintenance of 10 days. And the fear is that Russia is going to decide not to turn those flows back on, particularly because they have asked for there's a part that they need that was from Siemens that was being fixed in Canada.”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“Well, exactly. And we just don't have the thing is we don't have the battery storage capacity yet. I mean, the technology just isn't there yet. So they were trying to transition too quickly to get to, you know, net zero goals, climate change goals, climate accord from Paris. And so they were already having disastrous problems. And then add in Russian invasion of Ukraine, all of these sanctions, that just exacerbated the problem. Now, this is why people are worried is because really the EU gets 67% of their natural gas from Russia. And they really, you know, they should have been looking at long-term contracts with other countries long before, but they didn't. So now they're scrambling for long-term contracts. They've settled some with the United States. They're also looking to Israel and”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“Well, I would zoom up their energy policy as a disaster, which I mean, to be quite frank, and I've talked about this, you know, I've been talking about this for a couple of years now. This is nothing new, right? Take away, again, the Russian invasion of Ukraine. They were having problems long before then. You know, for the year prior, we were seeing rolling blackouts. We were having problems smelters had to go offline because energy was expensive. The problem is because they were trying to transition to renewable without really having a backup plan. So you can't really have intermittent power sources such as solar or wind as your base power load. You have to have either nuclear or natural gas or oil or something that is constant.”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“Even though U.S. natural gas is substantially lower than both of those contracts, people have to remember that we also came from, we were trading at $2 forever, right? So being at five, six, seven dollars is pretty huge for the US market.”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“Know the oil market is still very tight regardless even before the invasion of Ukraine, before that premium, I mean the physical market was still tight. We still have a supply deficits out to 2025 and beyond. And that you can note that within the crude spreads that they're all in background. So even it's interesting to note that even as we had this big pullback recently, the spreads still remain very tight. So the physical market is still very tight. There's really right now there's a huge disconnect between those two markets. And then if we look at the natural gas market, obviously we've been seeing that in JKM, which is the Asian market and TTF, which is the European market contracts.”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“So, when you had that explosive price action higher in, I think the latter part of February as the invasion was just happening, Russia's invasion into Ukraine. A lot of that was due to speculation that these barrels would come off the market. But as you say, and you've got some great charts that maybe we can put up showing how Russia is actually exporting more oil than it was in January before the war. So how would you, given that, how would you estimate the fundamentals of the oil and natural gas market?”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“Russian oil taken off the market, those buyers that have disappeared from the EU and from Canada and the US have been taken up with UAE, China and India mainly. So there's a lot less Russian barrels taken off the market. A lot of analysts thought there would be 4 million barrels per day taken off the market and we were just not seeing that right now. And so a lot of that risk premiums being flushed out of markets at this point.”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT
“Well, I mean, if you look at the 2008 or 2014-16, then probably not. But, you know, what I think is happening in this market is initially we had that huge kick up when the invasion of Ukraine came, right? And so we had a lot of, and then another kickup when it was announced that there might be sanctions on Russian oil, et cetera. And so a lot of that, we saw a lot of movement in not only energy, but also obviously agriculture and metals markets and fertilizer markets just because they're such a big exporter of natural resources. And so I think, you know, now we're kind of seeing some of that when we realize now that, you know, we aren't seeing as much.”
2022-07-21 · Forward Guidance · Why Are Commodities Crashing? | Tracy Shuchart · IDENTIFIED FROM THE TRANSCRIPT