Oil Market Impacts from Venezuela

Bullish:

• $GLD - Gold positioned for additional demand from central banks diversifying away from dollar amid US-China geopolitical tensions

  • “the gold price is up nearly 3% beyond today. I think the main reason is that the developments from the weekends confirm that we're living in a pretty fractured geopolitical environment where The US and China are competing commodities and for power”

    Daan·9:17

  • “it's in this fractured geopolitical environment that central banks in China and other emerging markets, I think, have strong incentives to buy gold, to diversify away from other currencies such as the dollar, and to hedge the risk of geopolitical tensions and sanctions”

    Daan·9:43

  • “ride the China US power race and go long gold because it's very well positioned for additional demand, especially from central banks”

    Daan·10:05

  • “I think our conviction at the margin in our bullish gold call is even slightly higher today than it was on Friday”

    Daan·10:14
• $USMAJORS - US oil majors with Venezuelan footprint positioned to benefit from potential production increases and government support

  • “It seems that investors are putting some stock in these comments judging by the rise in US oil majors' share prices”

    Allison·3:31

  • “I do think that investors are right in taking these developments and these comments seriously”

    Daan·3:45

  • “The key winners would potentially be US majors with a footprint in Venezuela, either today or historically”

    Daan·8:01

  • “the US government has shown, for instance, by supporting rare earth companies, that when the US government considers that national security is at stake, that the incentives and the support could make a meaningful difference to production and to the profitability of those companies”

    Daan·5:10
• $REFINERS - US Gulf Coast refiners perfectly positioned to process Venezuelan heavy oil with high margins due to infrastructure advantages

  • “US refiners, which were built typically many decades ago when Venezuela was producing a lot, are perfectly set up to treat and process this very heavy oil and make high margins”

    Daan·4:25

  • “It could also be positive for The US Gulf Coast refiners, which have been set up perfectly to treat the heavy oil from Venezuela”

    Daan·8:09

  • “it's also more valuable because the products you make from heavy oil such as diesel are priced at a higher price than some of the lighter products such as gasoline”

    Daan·4:53

Bearish:

• $SHALE - US shale producers face pressure from potential Venezuelan supply increases leading to lower prices and volumes

  • “it could also be negative for shale producers that don't have this footprint in Venezuela, both because of a potentially lower price and perhaps also because of lower volumes if marginal supply growth in five to ten years would come from Venezuela as opposed to from US shale”

    Daan·8:17
• $EUROMAJORS - European oil majors negatively impacted by potential Venezuelan supply increases benefiting US companies

  • “I think the effects elsewhere in the world are mostly negative, for instance, for non US producers that the European majors are down on the day”

    Daan·8:33
• $OIL - Oil prices face downward pressure from potential Venezuelan production increases adding significant supply by 2030

  • “In this bullish case from a supply perspective, where supply from Venezuela rises to about 2,000,000 barrels per day, we estimate that oil prices should be about $4 per barrel lower by 2030 because of the extra supply from Venezuela”

    Daan·6:36

  • “your forecast is already for a relatively oversupplied or well supplied market, at least, for the next few years”

    Allison·7:00