CNBC Overtime’s Post

Transcript

Things now is Jeff Curry, Chief Strategy officer of energy pathways at Carlyle's. Great to have you, Jeff. Now if, if I understand kind of the energy pathways thesis correctly, you're really looking primarily at energy supply, energy security, energy cost as major factors here. So what should investors look at? What is the market under appreciating here as a factor? Where should they put their money as a result at this point? The, you know, yes, oil is off a little bit in the, you know, the last several days, but let's look at it over the last, let's say three to four weeks. It's well off the lows. And I think it's important to point out it's off the lows without investor participation. There's been a little bit of recovery of the investors, but this has been an unloved rally. And it's important when you look at the structure of this market, the term structure, it's backwardated. When markets are backwardated, it tells you you're tight inventories are still expected to decline. 2 million barrels per day as we go into the third quarter, which should push us well above 90 into the mid $90.00 barrel range. And I think with that type of a fundamental backdrop, there's still a lot of opportunity to get into this market. And it's not just what we see in terms of, you know, the supply side on oil. You know, the big question for coming down the pipeline is what kind of stimulus is likely to come out of the Fed, but also likely to come potentially out of a Politburo meeting in China. We put that together on the demand. Side and then also on the supply side, you know, we're teed up for a pretty good rally going into the end of the summer. So Jeff, it sounds like and clarify for me here if I'm reading you wrong, at a time when we're really concerned about U.S. consumer demand. Overall, the demand picture you seem pretty bullish on and it affects not just oil but the whole commodities complex. Well, I mean, let's let's put it in perspective. If it it was off to a bad start, I'm not going to say that you know, but I think the bottom line is you're still tracking growth this year of 1.1 million barrels a day. That is trend demand growth historically. So there's a lot of concern about economic slowdown, you know, the green transition eating all of this demand growth away. The bottom line in a really bad year we're at historical trend level. So you have that core demand base there. Combine that with the OPEC production cuts, supply disruptions in there already low inventories, this market is relatively tight. But I do want to emphasize the investors are not seeing. I think the reason why the investors are absent is they don't have a strong grasp of what's happening in China right now, particularly given the fact that the Politburo is running out of potential options to stimulate the the Chinese economy by by point being here is you don't need a return to the strong momentum before, just keep this baseline. Going against that supply picture, these markets are gonna get tight, Yeah. And of course, deflation concerns in China are also in focus, especially given the data we got overnight. It's pretty typical historically to see in a US election year oil prices actually softer, weaker come off the fact that we've seen this move higher in recent weeks, Could this trigger another release from the SPR? Well, they're running out of time to, you know, have a significant package. I don't want to get into the politics because, you know, historically there there's, you know, a, a precedent of using it going into a political situation or an election. But that that said, the near term to do much about this summer. And, and I think what a lot of people are resting on and why the volatility is so low and they sell the ball up there towards $100 a barrel is the excess capacity sitting in OPEC that OPEC will chase any market. That goes substantially higher. Bring on the supplies team it bring it back down, which we mostly agree is why it'd be really difficult for this thing to surge that far above, you know, $100 a barrel. But I think, you know, to move from let's say 85 to 95, you know, over the course of the summer months, that can be achieved without doing too much damage to the economic environment, concerns about inflation and, you know, unlikely trigger that big of a response out of OPEC.