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Business. Bloenberg audio

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0:59

Hello and welcome to another episode of

1:01

The Odd Lots podcast. I'm Joe Wiesenthal.

1:04

And I'm Tracy Alaway. Tracy, we're in

1:06

London. Yes. How do you like it? I love it

1:08

so far. I'm having a great time. You know what

1:10

I've realized? I always make the mistake,

1:12

so I lived in London for a

1:15

long time. I went to university here,

1:17

my husband here, and I stayed here

1:19

for like over a decade. But I

1:21

realize whenever I go back, I always

1:24

make the mistake of doing it on

1:26

that one glorious spring day, where the

1:28

temperature is like 75 Fahrenheit, like 21

1:30

Celsius, and everything's blooming in central London,

1:33

and it's sunny, and it's beautiful. And

1:35

I think, wait, why did I leave?

1:37

but then the next day it's great yeah okay

1:39

there is that but I really I need

1:41

to come back in like January when it's

1:43

dark at three or four p.m. and remind

1:45

myself that there are in fact some downsides

1:47

of living here but it is very nice

1:49

to be back for a visit this is

1:52

actually my first time being in

1:54

the city right because I haven't

1:56

really stated this part of the

1:58

city before it's really nice all

2:00

the history and everything Despite being

2:02

here, we have no choice but

2:04

to continue covering various repercussions, fallouts,

2:06

updates, ongoing development in the trade

2:08

war, or whatever we're calling it,

2:10

the tariff, whatever. You would rather

2:12

be thinking of actual war

2:14

history and going to the Imperial

2:16

War Museum or something like that. So

2:19

on my one free day here, I

2:21

did the boomer thing, and I went

2:23

to the Imperial War Museum and I

2:25

saw a lot of things that I

2:27

only read about referenced in books. Anyway.

2:29

All kinds of dimensions in the

2:31

trade tensions and everything. But one

2:33

thing that's going on is big

2:35

impact on commodity markets. We've seen

2:37

the price of oil plunge as

2:39

recession fears get priced in. And

2:41

there was this headline in the New

2:44

York Times about China halting export of

2:46

rare earth metals as a retaliation. And

2:48

I just have to say. I've been

2:50

reading about channel halting exports of rare

2:53

earth metals and retaliation for my entire

2:55

life. It never seems to matter. It

2:57

never really seems to be a thing.

2:59

But it always is a really scary

3:01

headline. But I've never actually, nothing as

3:04

far as ever called ever gets shut

3:06

down or grinds to a halt from

3:08

these supposed export restrictions. This is one

3:10

of the greatest branding exercises of all time.

3:12

It's because it has the word rare in

3:15

the title, everyone can really easily. apparently make

3:17

the case that these are rare and you

3:19

really need to snap them up get the

3:21

exposure before China starts limiting exports and we

3:24

all have to pay through the nose for

3:26

these things but yeah it's never happened and

3:28

the rare as I don't know if we've

3:30

ever discussed on this show, but certainly

3:32

other people have discussed it at various

3:35

points in time. The rare actually isn't

3:37

that rare. There's a lot of them

3:39

out there. It's just no one really

3:41

likes getting them out of the ground

3:43

that much. So since we're here in

3:45

London, we can never talk to him

3:47

enough about commodity things and because they're

3:49

commodity things going on, I'm thrilled to

3:51

be in person. with our colleague Bloomberg

3:54

opinion scribe, Javier Bloss,

3:56

and knows everything about

3:58

all things commodities. Javier,

4:00

can you just rant for a couple

4:02

of minutes about rare earths? I'm not

4:05

even going to ask you a question,

4:07

just go on a rant about headlines

4:09

about China limiting rare earth exports. What's

4:12

the deal? Go. Joe Tracy, thank you

4:14

for having me. You have been listening

4:16

to these headlines and getting very scary

4:19

out. Yeah. It's going to be a

4:21

shortage of all for alone. period of

4:23

my professional life which is beginning to

4:26

be more than 25 years and it's

4:28

a great her to prove it. I

4:30

have to deal with editors will come

4:32

to me and say rival publication is

4:34

saying X, Y, said, red, earth, metal,

4:37

spannic. No, it's great for clicks, so

4:39

I get why your editors like it.

4:41

And then my editors will say, like,

4:43

should we be writing something about it?

4:45

And my default answer has been, no,

4:47

there is not going to be assorted.

4:49

And if there is a sortage, the

4:52

consequences are not going to be nearly

4:54

as material as people think that they're

4:56

going to be. So a couple of numbers.

4:58

Okay. The United States

5:00

imported last year in

5:02

2024 according to US

5:04

government data a grand

5:06

total of Give me the theme

5:09

music A hundred and seventy million

5:11

dollars of rare earth metals. No,

5:14

no, billion, a hundred and seventy

5:16

million. I'm pretty sure that the

5:18

United States imported more olive oil

5:21

from Korea Spain. I like that

5:23

olive oil is your baseline for

5:25

measuring value. And how much is that

5:27

the second number we are going

5:30

here? How much is a hundred

5:32

and seventy million? You compare that

5:34

to total trade between the United

5:37

States? and China. That is 0.03%.

5:39

So it's not a lot. And

5:42

the United States cool face, say,

5:44

a 10 times increase in the

5:46

price of rare earth metals

5:49

and still will have

5:51

no impact whatsoever on

5:53

the kind of the

5:55

American economy or the

5:57

global economy. And then

6:00

What really drives me mad is

6:02

that you are writing about rare

6:04

earth metals. Look, they are important

6:06

and they obviously for some very

6:08

niche applications you really need rare

6:11

earth metals. But prices could go

6:13

higher and those applications would just

6:15

pay the price. But typically, a

6:17

writer like myself, you want to

6:19

sex up a bit of the

6:22

story. You will say rare earth

6:24

metals critical for the weapons industry

6:26

for missiles and high-tech applications. Do

6:28

you know where... every one of

6:30

us have some rare earth

6:32

metals at home, they are used

6:35

in super permanent magnets. And therefore,

6:37

on that absolutely critical

6:39

instrument of economic warfare,

6:42

which is called the

6:44

vacuum cleaner. I will

6:46

say, I sympathize with

6:48

editors not wanting headlines

6:50

about vacuum cleaners versus,

6:52

you know, military equipment

6:54

and all of those

6:56

important strategic things. I

6:58

use in mind the story. The price

7:01

of rare earth metals may increase

7:03

and making vacuum cleaners a

7:05

bit more expensive. I don't

7:07

know you're going to click. Okay,

7:10

not to get all Judy Bloom

7:12

on everyone, but rare earths. They're

7:14

not as rare as the name

7:16

would imply, but walk us through

7:18

where they actually come from. A

7:20

lot of them come from China.

7:22

About 85% of the world's rare

7:25

earth metals come from China. It's

7:27

a question of digging them out

7:29

of the ground and then processing.

7:31

The big difficult part is processing

7:33

because it's very polluting and it's

7:36

a reason why all the processing

7:38

has moved from everywhere else in

7:40

the planet into China because no

7:42

one wanted to deal with how

7:44

nasty the process is. And here

7:46

is also the other question. You

7:49

want to do red earth metals

7:51

processing in particular outside China where

7:53

you need a much higher prices.

7:55

If anything the problem today with

7:57

red earth metals and it we

8:00

want to develop an industry of

8:02

rare earth metals outside China is

8:04

that prices are too low, we

8:06

need much higher prices, and then

8:08

everyone will do rare earth metals.

8:10

The other thing that will happen

8:12

is that the price goes to

8:14

a level that incentivizes everyone taking

8:16

a bit of care, while a

8:18

lot of engineers on the vacuum

8:20

cleaning industry will find ways to

8:22

do it without rare earth. metals

8:24

and also people will actually collect

8:26

the vacuum cleaners and recycle the

8:28

magnets for other use. But if rare

8:30

earths are, there's such a small component

8:32

of something like a vacuum cleaner,

8:34

I imagine the prices would have

8:37

to go up absolutely astronomically. for

8:39

that even to be a consideration

8:41

for a company making these things.

8:43

And most of the time, the

8:45

prices don't go nearly as

8:48

high. Prices are beginning to rise

8:50

again now, but prices stay relatively

8:52

low compared to where historically

8:54

prices have been. And we have

8:57

had the latest headlines about red

8:59

earth metals and export restrictions.

9:01

We have some similar headlines for

9:04

other categories of metals that we

9:06

call critical minerals and other fantastic

9:08

exercise of labeling. I mean like

9:11

you want to sell something, call

9:13

it. critical minerals. And we have,

9:15

you know, people were really concerned

9:18

because China was imposing some espor

9:20

restrictions on tuxen, tellurion, bismuth, molybdenum,

9:22

and Indian. This sounds to me

9:24

like high school chemistry. And you

9:26

will think, oh my God, what

9:28

is happening with the price of

9:30

all of these? I mean, this

9:32

was not announced yesterday. This was

9:34

announced a couple of months ago

9:36

and prices moved. And yes, the

9:39

price of, say, Indian moved

9:41

to $345 per kilogram. And

9:43

you will say, well, is

9:45

that a lot? Look, yeah,

9:47

it's 20% increase from where

9:49

we were at the end

9:51

of last year. But about

9:53

10 years ago, that is

9:56

cost today, $345 was worth

9:58

$100 per kilogram. And did

10:00

you notice 10 years ago that it

10:02

was a crisis on the Indian market

10:04

and everyone was a bit worried about

10:06

it? Because I didn't. I didn't notice,

10:08

you know, you know, we're still going

10:10

to give this a provocative headline, even

10:12

though, you know, that people will listen

10:15

to the episode and reveal that there

10:17

is... Why everyone's talking about

10:19

the rare earth shortage? Have you

10:21

watched other truth about the rare

10:23

earth? You know, we'll still make

10:25

it. You know, what I want

10:27

to say also is, look, yes,

10:29

it's a serious issue. And yes,

10:32

I mean, depending by 80% of

10:34

a single country is never a

10:36

good idea. But there is an

10:38

element of panic that every time.

10:40

And look, a lot of this

10:42

panic comes from the handful of...

10:44

miners and processor of rare

10:47

earth metals outside China. And

10:49

you as a consultant on

10:51

the rare earth metals industry.

10:54

Is this something that we should

10:56

be caring about? Well, the answer

10:58

is going to be, yeah, hell yes.

11:00

Yeah, right. Tumoth, by the way, says

11:03

he has access to rare

11:05

earth minerals. He's invested

11:07

in some companies, so we're

11:09

fine. That fits so perfectly

11:11

with this entire thing. KPMG

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11:21

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11:23

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11:25

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11:27

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11:30

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11:32

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11:35

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11:37

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11:39

and transparent outcomes.

11:42

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11:44

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11:46

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11:53

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are subject to change and certain

12:57

restrictions may apply. You did an

12:59

amazing video the other day. I

13:02

really, I think it was true

13:04

art actually. Whether we're talking about

13:06

rare earth metals or quote critical

13:08

minerals unquote, what are the economics

13:11

of getting them in Greenland? Okay,

13:13

let me just put my polar

13:15

outfit and so on. No, they

13:17

are not natural resources in Greenland

13:20

period unless we are to use

13:22

mining eyes. Yes, they are some.

13:24

small concentrations of rare earth in

13:26

the South, there is a bit

13:29

of uranium here and there, there

13:31

is this and that, but the

13:33

concentrations are very low and the

13:35

course of mining in Greenland is

13:38

prohibitively expensive and you are not

13:40

going to develop anything of even

13:42

medium-sized mining operation in Greenland. I

13:45

think that Here is the exaggeration,

13:47

but you have a better chance

13:49

of finding some minerals. on my

13:51

back garden in West London that

13:54

you have in Greenland. Now I'm

13:56

fearing that I'm going to become

13:58

the 55 state. That's fun. Joe's

14:00

embraced his middle-aged man, Destiny, of

14:03

becoming a military historian expert. So

14:05

there's that. That's why he's at

14:07

the Imperial War Museum. So no

14:09

shame. No shame. But since we're

14:12

talking strategy approaches and maybe acquiring

14:14

Greenland could be one of them,

14:16

the thing I don't understand is

14:19

if we agree that rare earths,

14:21

rare minerals, are of some strategic

14:23

importance for the US and they

14:25

are something you would want access

14:28

to but on the other hand

14:30

we actually have plenty of them

14:32

it's just we don't necessarily historically

14:34

want to get them out of

14:37

the ground would the better approach

14:39

not have been to just build

14:41

massive inventories of these things just

14:43

get them on the cheap from

14:46

China let China tear up its

14:48

countryside and we could buy those

14:50

things from China and then once

14:52

supply starts running out or if

14:55

relations really start to deteriorate then

14:57

we could start our own industry.

14:59

Or is that difficult? What's the

15:02

start-up process like for something like

15:04

that? No, and that's what some

15:06

companies, I mean, governments have not

15:08

done their stockpiling, but some companies

15:11

have done their stockpiling themselves. They

15:13

are Japanese high-tech companies that they

15:15

are running more than a year

15:17

worth of their demand for red

15:20

earth as a stockpile. And again,

15:22

these in certain ways make sense,

15:24

because if you think about Japan,

15:26

a country that probably imports 50

15:29

to 75 million dollars a year,

15:31

right out of metals. important and

15:33

stockpiling, say, a year or a

15:35

couple of years worth of the

15:38

staff, is not that expensive. I

15:40

mean, for Japanese companies, this is

15:42

going to be like completely random

15:45

error on their huge balance sheet.

15:47

So we have seen a bit

15:49

of a stockpiling and companies that

15:51

they really require some particular metal

15:54

for a very particular application, they

15:56

will have done it. And then

15:58

governments, what they can do is

16:00

look, this is critical. We are

16:03

going to support our domestic industry.

16:05

The United States has red. as

16:07

accumulations, there is a mine called

16:09

Mountain Pass, we can't develop that.

16:12

The government can get into the

16:14

business on developing that. The price

16:16

is going to be that we

16:18

need higher prices. So you are

16:21

going to have to protect either

16:23

you effectively, I mean here is

16:25

the irony, the best way to

16:28

develop an industry in the United

16:30

States and develop the local mining

16:32

supply of red earth will be

16:34

to impose some huge tariffs on

16:37

red earth from China. So the

16:39

Chinese don't... Don't dump the Red

16:41

Arts into the market. I mean

16:43

this is protectionism. I mean this

16:46

might be the vision more or

16:48

less across a range of industries

16:50

which is sort of like take

16:52

a wrecking ball to a lot

16:55

of you know Elite things are

16:57

comfortable jobs in government and finance

16:59

and media etc and send you

17:02

know free up that workforce to

17:04

mine Molly Dunham, right? We're all

17:06

going to be working in the

17:08

minds. I mean this is Kind

17:11

of the vision. All right, let's

17:13

talk about something that may actually

17:15

be real and substantive now that

17:17

you've convinced me not to worry

17:20

too much. And also, like, if

17:22

we're ever a crisis, government could

17:24

just come door to door and

17:26

demand your vacuum cleaner, right? Like

17:29

if that's like for the missiles

17:31

and whatever, like at the end,

17:33

they're like, all right, we're going

17:35

to confiscate your vacuum cleaner. and

17:38

they give you a broom. The

17:40

government will pry my Dyson out

17:42

of my cold dead hands. Saying

17:45

that right now. Let's talk about

17:47

a commodity that really actually has

17:49

real significance. Part of we've mentioned

17:51

this a couple times on the

17:54

show. Secretary of the Treasury Scott

17:56

Besson had in the run-up to

17:58

the election or post-election talked about

18:00

his 3-3 plan, get the budget

18:03

deficit down to 3%, grow GDP

18:05

by 3% and increase 3 million

18:07

more barrels of US oil. per

18:09

year. It seems like we're going

18:12

in the opposite direction of that.

18:14

Yeah. are in prices, certainly we

18:16

are likely to see lower American

18:18

oil production than HIGER. I mean,

18:21

Secretary Bessett was quite clever on

18:23

the way that he expressed it.

18:25

He talked about growing three million

18:28

barrels a day of energy. He

18:30

didn't say specifically oil. I mean,

18:32

when you talk about barrels, you

18:34

think that he's talking about oil,

18:37

but he means barrel equivalents. So

18:39

you could put anything there. At

18:41

the moment, the administration is already

18:43

including natural gas and that three.

18:46

I have been hearing some officials

18:48

in the administration saying, look, energy

18:50

is energy. So we are growing

18:52

electricity. We are growing uranium. We

18:55

are growing coal. You put it

18:57

on a basis of oil equivalent.

18:59

and there you get. I would

19:01

not be surprised if we are

19:04

also growing more California and olive

19:06

oil and we are adding it

19:08

into the barrel. But look, West

19:11

Texas intermediate, the US oil benchmark

19:13

is trading close to $60 a

19:15

barrel. You are there borderline where

19:17

it's economical for shale, on average

19:20

for shale companies to drill new

19:22

wells. So we should start to

19:24

see a significant slowdown in the

19:26

growth rate of the US oil

19:29

industry and if prices to continue

19:31

at this level or lower, that

19:33

is low down soon will be

19:35

turning into a contraction and we

19:38

will see lower American oil production.

19:40

Yeah, I mean, even if we

19:42

think the administration was talking about

19:44

energy units rather than just oil.

19:47

per se. It does seem clear

19:49

that there are a lot of

19:51

people in the energy patch itself

19:54

which seemed to have had a

19:56

different idea, right? They thought the

19:58

administration was going to be very

20:00

very friendly to the shale industry

20:03

and instead Joe and I have

20:05

mentioned this a few times before

20:07

but we've seen anecdotally some you

20:09

know some statements from the Dallas

20:12

Fed's energy survey where people are

20:14

going like this is not what

20:16

we signed up for at $50

20:18

per barrel oil prices this is

20:21

not only bad for increased investment

20:23

in the industry but could potentially

20:25

be a sort of existential threat.

20:28

So absolutely. I mean, Chris Wright,

20:30

the Secretary of Energy, is an

20:32

oil person. He founded and ran

20:34

his own oil company, service company,

20:37

called Liberty Energy. And a lot

20:39

of people in the industry thought

20:41

that, you know, to quote an

20:43

executive I spoke recently in Keystone,

20:46

he thought, or the industry thought

20:48

that Chris Wright was our guy.

20:50

He was one of ours. One

20:52

of ours. And this executive said,

20:55

like, what we have came to

20:57

realize is that he's not one

20:59

of us. He is Trump's guy.

21:01

And that is a big difference.

21:04

And yes, the comments in these

21:06

anonymous Dallas Fed survey were quite

21:08

shocking. And if you talk in

21:11

private to executives in the oil

21:13

industry, I almost have to pinch

21:15

myself at times. It's like, hold

21:17

on a second. Is Biden still

21:20

on the White House? Because you

21:22

guys seems to really dislike everything.

21:24

You could replace Trump with the

21:26

word Biden and it would make

21:29

sense. Yeah. It's like when I

21:31

was reading that series of comments

21:33

from the Dallas Fed, I joked

21:35

that. You have been sleeping for

21:38

six months and wake up. You

21:40

will think that the Democrats are

21:42

still running the White House and

21:44

Congress and etc. I mean, this

21:47

was a dream for the oil

21:49

industry. It is a Republican at

21:51

the White House. The Secretary of

21:54

the Treasury is a Wall Street

21:56

H fund manager and the Secretary

21:58

of Energy is the founder of

22:00

an oil company. And here we

22:03

are. everyone in the oil pot,

22:05

perhaps because of this, is absolutely

22:07

mad with the administration. the difference

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may apply. I have a really

23:28

dumb question and I'm going to

23:31

ask a real question. Why do

23:33

we call it the oil patch?

23:35

I don't know. Oh, sorry. I

23:37

didn't mean to stump you. No,

23:39

this is, can I use Google?

23:41

Oh, sorry, we can cut this.

23:43

Can we keep this in? Can

23:45

we keep this in? Can I

23:48

stump Tave? Can we keep this

23:50

in? Yeah, we're going to keep

23:52

this in. I don't know why

23:54

it's poetic. gardening. It kind of

23:56

sounds like, you know, you're growing

23:58

vegetables on your oil patch, except

24:00

it's like liquid carbon. Some things

24:02

on the oil part, like the

24:05

pipe that you used to drill,

24:07

is called OCTG. Oil county tubular

24:09

good. Oh, yeah. I have no

24:11

idea why my oil county, but

24:13

it's oil part, oil county, this,

24:15

you know, it's, it's the oil.

24:17

place. And I have a real

24:19

question. The oil place. What the

24:22

oil place? I'm going to start

24:24

calling. We're all going to go

24:26

down to the oil place. What

24:28

people are talking about. The oil

24:30

place. Okay, I have a real

24:32

question, substantive one, which is one

24:34

of these sort of like booming

24:36

export industries for the US was

24:39

natural gas and this sort of

24:41

LNG terminals and I think Biden

24:43

put a pause on them and

24:45

that pause. I don't know if

24:47

it's been lifted, but it will

24:49

be lifted almost certainly, construction of

24:51

new ones. With the trade war,

24:53

have the economics... of LNG export

24:56

change at all, or with the

24:58

decline in oil prices. Like, has

25:00

anything, have any dials moved on

25:02

that front? No, yet, and potentially,

25:04

yes, because one big buyer of

25:06

American LNG was China, and China

25:08

has not bought any LNG from

25:10

America in America in a long

25:13

while. And also, if oil production

25:15

starts to decline, when you drill

25:17

for oil, you usually get a

25:19

mix of hydrocarbons up to the

25:21

ground, you will get oil, you

25:23

will get gas. So if you

25:25

like, if you're wells, if you're

25:27

wells, yeah. oil wells, you're going

25:30

to have fewer gas wells, so

25:32

the input cost of gas is

25:34

going to go higher, and you

25:36

may have a bit of lack

25:38

of demand on the other side

25:40

from China. So far, all is

25:42

good because the European Union and

25:44

the UK still need a lot

25:47

of natural gas from the United

25:49

States. The big expansion of Qatar

25:51

is still about 12 to 18

25:53

months away. Russia is fighting with

25:55

Ukraine and is not a sporting

25:57

what they used to. But in

25:59

a year's time, that could be

26:01

a big deal. The other, to

26:04

me, very important... topic in trade

26:06

and oil is that oil used

26:08

to be almost the largest component

26:10

of the American trade deficit in

26:12

goods. If you go to 2008,

26:14

the US trade deficit was around

26:16

running around $800 billion a year.

26:18

Of that nearly $400 billion was

26:21

oil. Today we are on a

26:23

surplus for oil. How times have

26:25

changed. I have one more question

26:27

just on oil specifically, but one

26:29

of the hallmarks of the Trump

26:31

administration is they tend to... promise

26:33

everything to all people and arguably

26:35

that's been a big component of

26:38

their success. And I think when

26:40

it comes to energy policies specifically,

26:42

one of the promises was we're

26:44

going to be good for the

26:46

energy industry for oil specifically and

26:48

at the same time we're going

26:50

to be good for inflation, we're

26:52

going to bring down prices, you're

26:55

not going to have to pay

26:57

these exorbitant dollar amounts at the

26:59

pump. Is there any way, you

27:01

know, let's assume that the tariffs

27:03

start working? Maybe growth expectations start

27:05

to pick up. Is there any

27:07

way that the Trump administration can

27:09

end up fulfilling its various policies

27:12

when it comes to energy to

27:14

everyone involved here? Is there a

27:16

way where eventually maybe they, you

27:18

know, make up with the oil

27:20

industry, the shale industry, and maybe

27:22

somehow they, I don't know, encourage

27:24

energy from other sources and inflation

27:26

still, you know. comes down. What's

27:29

the best case scenario here? I

27:31

think that the best case scenario

27:33

you're putting me here on the

27:35

spot, but I think probably something

27:37

like, let's call it, I mean,

27:39

Let's call it the Goldilogues, the

27:41

middle ground, what the oil patch

27:43

will love and a mainstream will

27:46

be happy. Say $75 a barrel.

27:48

$75 a barrel is not breaking

27:50

the budget of any middle-class family

27:52

or working-class family when it comes

27:54

to gasoline in the United States.

27:56

And $75 a barrel, the American

27:58

oil industry is making money. No

28:00

problem. whatsoever. Whoever is complaining at

28:03

75 probably doesn't have a very

28:05

very good business case. The main

28:07

problem is to make it everything

28:09

work at 75 and just for

28:11

the sake of the argument let's

28:13

say that the magic number is

28:15

75 you cannot get that running

28:17

unless you get OPEC on board

28:20

and they keep restraining production and

28:22

losing market share because $75 a

28:24

barrel means that the consumers are

28:26

happy and they continue to consume

28:28

but also that they... US shale

28:30

industry continues to grow. And at

28:32

some point, someone needs to produce

28:34

less. So you can, even if

28:36

that magic number existed, and I

28:39

think that 75 probably is about

28:41

right, you need OPEC to play

28:43

ball and accept that they're gonna

28:45

lose market share forever and ever.

28:47

And I don't think that they're

28:49

on that business. Yeah, so last

28:51

question for me, but how has

28:53

Trump, maybe his tariffs and is

28:56

provocative. actions towards literally or virtually

28:58

every country in the world. How

29:00

is it interacting with OPEC specifically?

29:02

I think on one side, the

29:04

Toronto administration is putting quality of

29:06

diplomatic pressure on OPEC countries to

29:08

increase production. And we saw Saudi

29:10

Arabia increasing production. Secretary of Energy

29:13

is in Saudi Arabia right now

29:15

and is discussing mostly nuclear affairs.

29:17

About the South is one American

29:19

technology for nuclear civilian. at least

29:21

civilian quote unquote nuclear technology. So

29:23

there are a lot of things

29:25

that the Saudis made one from

29:27

the United States and the United

29:30

States won the Saudis to increase

29:32

production to put prices down. But

29:34

use by large, if I can't

29:36

summarize what is the feeling of

29:38

my OPEC sources right now, I

29:40

think it's very similar to what

29:42

the bankers and traders that you

29:44

guys are talking every day, probably

29:47

are saying. It's like what. or

29:49

hard, it's going on here because

29:51

no one really knows. I mean,

29:53

how do you plan? You are

29:55

an OPEC country and you are

29:57

trying to decide oil production policy

29:59

for the... next three months, how

30:01

do you plan that? Well, you

30:04

don't really know what tomorrow morning

30:06

or maybe tonight brings. Yeah, and

30:08

even if we assume that this,

30:10

you know, this was it, nothing

30:12

else was going to change now,

30:14

that uncertainty premium is in the

30:16

markets and regardless of what Trump

30:18

actually changes from now on. we

30:21

know that it looks like global

30:23

growth is going to slow right

30:25

so you're asking OPEC to basically

30:27

boost production into a slowing global

30:29

economy. I mean we that is

30:31

to me that was because every

30:33

other asset class was dealing effectively

30:35

with one shock and that was

30:38

a demand shock everyone was just

30:40

like assuming okay we are going

30:42

to slow down oil was dealing

30:44

simultaneously with a demand shock and

30:46

what I will call a supply

30:48

surprise. I'm not gonna, I mean

30:50

the increasing OPEC production is not

30:52

yet enough to call it a

30:55

shock, but let's call it a

30:57

supply surprise that can very quickly

30:59

became a shock. So you know

31:01

that is why oil prices went

31:03

down so much and that's also

31:05

why oil equity is really absolutely

31:07

tanked. Have you a bless always

31:09

great catching up with you so

31:12

great to do it finally here

31:14

in your home court appreciate on

31:16

his home patch Yeah in his

31:18

home patch. Thank you for having

31:20

me and I'm going to be

31:22

googling now oil pot. Okay, great

31:33

That was fun. I can't believe I

31:35

got to stump Hovey on an energy

31:37

related question. Yeah, it's a highlight of

31:39

my week. But I strongly suspect that's

31:41

just like a literary term that someone

31:43

came up with and it sounds kind

31:45

of nice. It sounds kind of down

31:47

home, Texas, you know. And people went

31:50

with it. But I do think, oh,

31:52

there's so much, there's so much going

31:54

on. Can I say, yeah. US only

31:56

importing $170 million dollars worth of, that

31:58

is a very good stat, by the

32:00

way. everyone should stay listening. Hopefully they're

32:02

listening. Odd lots listeners can now repeat

32:04

this in part. Like that is one

32:06

of those good stats that like odd

32:08

lots listeners can repeat at parties. It's

32:10

good party trivia for odd lots listeners

32:12

assuming that they're actually getting invited to

32:14

parties with the chat like that. They

32:16

are, they are, they are. Did you

32:18

know? Actually, we all know that they're

32:20

not rare, like that part we knew

32:23

at this point. I did not quite

32:25

realize how small the scale of the

32:27

important. No, if a guy came up

32:29

to me at a party and said,

32:31

did you know in fact that rare

32:33

earths were not in fact that rare,

32:35

rare, I would be, what's that, you

32:37

know, that meme of the guy, like,

32:39

whispering into a girl's ear? That would

32:41

be my face, I'd be like, whatever.

32:43

What if you followed that up with

32:45

the vacuum cleaner, with the vacuum cleaner's

32:47

part, Yeah, that's mildly more interesting. Yes,

32:49

I'm saying there's a little something there.

32:51

Although then I would be like, why

32:53

are you talking to me about vacuum

32:56

cleaners? Do you think this is something

32:58

that I'm especially interested in? Well, anyway,

33:00

lots to talk about. I'm sure we

33:02

will continue our spate of basically daily

33:04

episodes at this point. But should we

33:06

leave it there for now? Let's leave

33:08

it there. This has been another episode

33:10

of the Odd Thoughts podcast. I'm Tracy

33:12

Allaway. You can follow me at Tracy

33:14

Allaway. And I'm Joe Wisonthaw. You can

33:16

follow me at the stalwart. Fellow our

33:18

guest, Javier Bloss. He's at Javier Bloss.

33:20

Follow our producers, Carmen Rodriguez, at Carmen

33:22

Armit. Joe Bennet, at Carmen Armit, at

33:24

Dashbot, and Kel Brooks. And thank you

33:26

to our producer, Moses Andam, who is

33:29

here with us in studio in studio

33:31

in studio in studio studio studio in

33:33

London. subscribe to and you can chat

33:35

about all of these topics 24-7 in

33:37

our discord discord.g.org/odd lots. And if you

33:39

enjoy odd lots, if you like it

33:41

when we talk about the oil patch

33:43

on Javier's home patch, then please leave

33:45

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33:47

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33:49

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33:51

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follow the instructions there. Thanks for listening.

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