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Energy is such an interesting trade right now. All of this has happened with China in various states of lockdown, what happens if that demand comes back. On the other hand, long O&G seems to be the one trade that the central banks are out to wreck at all costs, but can they actually follow through without bankrupting their own governments (recession, tax receipts down, debt service costs up) or losing their constituents. I am not particularly long energy (although I wish I was!) -- just sitting in my usual allocation to Canadian equity -- but it really doesn't feel to me like the central banks are in control.
 

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I mean look at this. Energy Secretary for the largest economy and producer of oil and leader of the free world making the rounds with a plan that involves the president writing letters to oil and gas companies demanding that they should "increase supply". Then we have an interlude around big oil making too much money and the denouement is we want to put you all out of business as soon as we can anyway. Oil is going to 200 and Putin must be laughing.

 

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The current WH administration sure does have this one mucked up. It's unbelievable how incredibly stupid this current behaviour currently is but it really just shows how desperate the political situation actually is at this point. Imagine a windfall profit tax while at the same time admonishing the industry for not spending more capital. Never mind that spending more capital will have no near term effect and that no prudent company will spend money on anything requiring more than a 3-5 year payout, never mind a return on investment.
At what point does it become not-crazy to start worrying that we might get price controls and rationing?
 
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