Let's get to our next guest. We're talking to Kylie Ghana, senior commodity strategistem broker at the Kylieue Trading And of course, Kylie, we've had the press conference this morning from President Biden talking about he would how he would look to impose higher taxes on oil companies that record windfoil windfall profits without reinvesting this in production. How realistic is this policy From the looks of things, I think this is more talk.
I don't think that it's realistic that we would actually have it. He would actually have a chance to implement this policy, but I think he just the talk actually does quite a bit of damage to market confidence. And the reality is commodities are a boom and bust industry. The highs are really high and the lows are really low. So if we're gonna a tax success, we're probably gonna have to prepare to subsidize during bad times because the
bad times will come back around. They always do. You know, it was a pretty long period about five teen years or so that the oil industry struggled a little bit. I mean, if you look at even excellent mobiles, um stop price it's now it's at ten dollars, but it was at ninety three dollars back in in two thousand and seven, so that's not a huge gain. It's only a gain over over all this many years, fifteen years, um. And and the oil price itself was at eighty dollars
back in those in those mid two thousand's as as well. UM. The President when he made his comments today, really referred to the big change from last year to this year. But is there a little bit of a loss of perspective in all of this? In my opinion, there is. I really don't like the spirit of of this type of policy. I mean, the reality is tax cuts deter investment in new production as opposed to doing the opposite, which I believe is the goal is to get oil
producers to produce more. But the reality is, unfortunately nobody wants to hear this, but maybe tax breaks two small producers might be a way to do that. Um. Maybe low uh sorry, low interest rate loans too small producers, because it is the small producers that don't have to answer to shareholders and they're the ones they can pick up the slack, and they have been picking up the slack. If you look at the US production at this particular time,
we're almost up to the early levels. Similar Similarly, OPEC is as well, so we're producing almost as much oil globally as we did in early everybody's still just trying to recalibrate from all the chaos. I mean, the oil industry has been through two black Swan events in the same amount of years. We had the COVID crash and
then we had the Russian invasion. If it weren't for those two events, my opinion is we probably would be uh in a comfort zone between about ninety two and sixty five that I got that based on a chart channel that we had been in trading before and after these two events, um with some of very aberrations. Let's take a look at the Baker Hues rig count as well. That's slowly grinding higher. It's up about from about five and thirty now six hundred ten since we had the
peak of w T I and March. Are you surprised that, with prices high and seemingly enduringly high, that we haven't seen US shower production crank up a bit more? You know, I think production is coming, and it's but it's coming slower than what we're used to. But to be honest, I don't think that's such a bad thing in the long run. I think price stability is what is going to be healthy for both businesses and consumers and and everybody involved. It's interesting you mentioned the recount we started
a couple of years ago. The recount I think was somewhere around a hundred and seventy, and you're right now we're up around a two hundred, two year high over six hundred. So supply is coming. It's just not coming as fast as we all wanted to because we were feeling it at the pump. But it it is coming, and I think, um, ideally, in a perfect world, we'd like to see some some bald on thing, like I said, uh, somewhere in the sixty five to ninety dollar area crewed.
Hopefully we'll find the comfort zone and we can I'll get back on with our lives. If you had to pick a date where we would have the right balance between supply and demand, when might that be? Well, the interesting thing is we don't know what we don't know. You know, if you would have asked us that in January, we would have a completely different answer than what we might have just a few months later. So all we can do is take it day by day. But I
think we're closer than most people realize. If you look at UM the big picture numbers roughly about a hundred um hunter million barrels a date in both production and consumption. We seem to be balancing out there. That's exactly where we were when prices were kind of stabilized in between about two thousand eighteen and two thousand nineteen. Prices were pretty stable around the sixty dollar range, and we had a very similar type of global production and supply figures.
Now I know there's prospects and speculation that China is going to come back online and all of these things are going to be uh brought out a balance again. But the reality is, again we don't know what we don't know, so we just could take it day by day and see how things go. Okay, I'll put you on this spot July one next year. Where do you see w A T I crude, Well, I think we're gonna be closer to six than we are a hundred. Hopefully that helps. I I believe that. Do you think
do you think recession is coming? Um? I think that we're in recession, and I think that the reality is in commodities, high price is always cure high prices, and I don't think we've completed the downside cycle yet. That's a good point, Okay, Carl, Thank you very much for being with us. Carly Garner, senior commodity strategist and broker at De Carli Trading