Invest Like The Best
Episode 160 Oil Price War and Its Implications
Invest Like The Best

Episode 160: Oil Price War and Its Implications

Invest Like The Best

Episode 160

Oil Price War and Its Implications

Matt Smith is CEO & Chief Investment Officer, Ian Singer and Kobi Platt are Partners at Deep Basin Capital. We cover global oil supply and demand shocks, oil price war and its impact on US energy market, and long-term investing in the energy sector.

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[00:01:59] – An overview of the global oil market and demand

[00:03:37]– Supply and demand shocks we’ve seen lately

[00:06:22]– What happened this weekend with Russia and Saudi Arabia and why the outcome was so shocking

[00:09:45] – The knock-on effects of this activity on equities

[00:14:24] – Impact on US energy production

[00:18:29] – What other industries will feel the effect of reduced production in the US

[00:20:35] – Defining a price war and how victory is defined

[00:27:53] – Saudi Arabia’s calculus in this energy fight.

[00:31:11] – How does all of this change what factors they use to analyze companies

[00:35:43] – What it actually looks like within the commodities markets to trade energy

[00:40:01] – What uncertainty is most intriguing to each of them

[00:43:00] – The long-term interest in investing in the energy sector

Oil Price War and Its Implications

Introduction

Patrick
This week I'll be recording and immediately releasing a series of conversations on business and market reactions to the spread of Coronavirus. The conversations will be on oil and gas, corporate credit, and the reaction within the venture capital community. Today's conversation is with Matt Smith, Ian Singer, and Kobi Platt of Deep Basin Capital, a long/short energy specialist. We are investors in Deep Basin, and they were guests on the podcast last year. We discussed the new price war in the oil markets and the impact that it might have on equities, and especially on the US oil producers. We cover commodities markets, equities, and geopolitical considerations globally. Please enjoy.

Gentlemen, we're going to talk about what the hell's going on in oil and gas markets over the weekend, and the beginning of this week. It's been probably a historic, maybe the last 30 years most significant big event in oil markets. I thought to begin, we could lay a very broad picture with Kobi, you describing in the most basic terms, how much oil is produced in the world in terms measured in barrels? Maybe, pick apart the supply, where does it come from? Then pick apart the demand, what are the major sources of demand, and where does that come from? Because that will help us explain what happened with OPEC Plus over the weekend.

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