All right, well, let's get over to our next guests. And joining us now is a Kylie Ghana, senior community strategist and broke Decarlie Trading. She's had to discuss the oil market ahead of that Wednesday decision from OPEQ plus. Kylie, welcome to the program. And we've been reporting that well yesterday that we were looking at a million dollars uh, sorry, million barrels a day about put being cut. Today we're talking perhaps as much as two million barrels a day, Karlie.
That I mean, you know, you do cut that much, but it doesn't really change the supply picture as much as one would think. Correct, correct, because OPEC is currently missing their quotas anyway. So this is in my opinion, OPEC is basically taking a page out of the Federal Reserve playbook and that they're talking their book. Yeah, they're not having as much success as the fedhead with interest rates, but I think they're you know, they're going to continue to try to do that. And I don't think we're
going to see a really big production cut tomorrow. I could be wrong. OPECK is sometimes very difficult to predict, but for political reasons and and just the purpose of a cartel is to keep prices high, but to do it in a way that doesn't ruffle anyone's feathers and encourage others to either increase production like shale producers, or um other consumers to come up with alternatives. So I don't think they're going to make any really big drastic moves,
but I think it'll be a psychological move. Maybe half a million, maybe a million. But either way, as you said, it's probably not going to take that many barrels off the market, if it does any at all. I saw a couple of other interesting lines. One was that I'm in Nassa. The CEO of Aramco in our story said that spare capacity is is very low and there won't be any left at all. One's China ends COVID zero. Now we know that's not right around the corner, but
it's something that eventually will happen. And the other line that was interesting was the energy tracker VORTEXA said that China had already shipped in a record volume of fuel oil from Russia last month because importers are out there, you know, snatching up these these discounted um supply levels. Uh. The way that I see it is. China will obviously eventually come online. But luckily, UM, they're giving us a
chance to flatten the curve. We are seeing shale oil producers very very very slowly coming up up to the plate. The rig count in the US is coming up a little, probably more from independent producers than the big companies. But the reality of commodities is high prices always cure high prices, and that's exactly what we've seen here in the last couple of months. If you look at a really big picture chart of the s I'm sorry of crude oil. We had we not had the COVID meltdown and then
again the Russian Ukraine Ukraine situation this year. Uh. Those two events pushed prices well beyond what probably would have been a normal band of of price discovery. Uh. But since then, now that things have calmed down a little bit, we're right in the middle of a trading range that probably should have existed had those two events not occurred. In my view from a charting standpoint, I think we've
got an upside of about limit. And then on the downside, I think, believe it or not, I think we will see sixty five even if China comes back online. I think between demand destruction and other things going on, possibly if the dollars stays lofty, that will eventually continue to work against Doyle. The big relly we've seen in the last couple of days is largely a dollar story, not
necessarily an OPEC story, Carli. When you look at the the oil market as it is at the moment, you know, and as it was, let's say, about five years ago, it seemed almost as a shale was the sort of swing producer. What's happened to change that? Because it doesn't seem to be as influential as they were before. No, You're absolutely right, they've they've taken a step back. I think they got burned a few too many times, and and now they're a little bit cautious. They're listening to shareholders.
I think there are some the pendulum swings wildly in both directions, and I think it uh probably between you know, the energy revolution, pressure from shareholders and politicians and things like that obviously went to one side of the equation, and now I think we're swinging back to the other. It'll just take some time. Unfortunately, UM, it's not something you can snap your fingers and it happens. But I don't.
I think all of us could agree it's the US isn't a better spot if we produce our own energy. So I think that's eventually going to happen. Again, just looking at the charts, and you touched on this a little bit already, looking at the charts over the past six to nine months, you got up there around one twenty and down to about seventy five or so, and it seems like there's it feels like around ninety is
this sort of median level there is? That? Is that something if you really wanted to look out over the next six months, that is kind of where prices might hover. Absolutely, I think night somewhere around let's just say the low nineties, because this is a messy market and picking in exact numbers impossible, but somewhere in the low nineties is a significant pivot area. If prices stay below that, as I suspect they will, I think that we continue to see
the overall down trend. If prices poke above let's say or so, that might prove me wrong and maybe we go much higher. I don't think that's going to happen. I think that um Like I said, with all the things going into China and some of the other things, I think we're flattening the curve and giving ourselves a chance to catch up on some of the stuff. Hopefully that's the case very quickly. Uh what do you how do you see a large cup playing out with regards
to the global energy crunch? Well, I mean, the one thing that I'm paying attention to primarily here because supply demand fundamentals are really uh, they're They're tough to figure out in real time. So what I'm looking at is correlations. I've noticed that the correlation between the SMP five hundred, the Treasury notes, gold, and crude oil are all about negative to the US dollar, meaning the dollars really driving
the ship here. So what we really need to see is the dollar stabilize and then we can start seeing price discovering commodities. Okay, thanks so much, Carlie. Carlie Garner, a senior commodity strategist and broker at Decarli Trading.