MAYBE WHY SHAKE SHACK SAID LET’S
WALK AWAY FROM THIS.
WALK AWAY FROM THIS.
EDWARD LAWRENCE, THANK YOU VERY
EDWARD LAWRENCE, THANK YOU VERY
MUCH.
MUCH.
WE’RE TALKING ABOUT OIL PRICES
WE’RE TALKING ABOUT OIL PRICES
SLIP-SLIDING AWAY.
SLIP-SLIDING AWAY.
WHEN THEY TOUCHED AROUND $10,
WHEN THEY TOUCHED AROUND $10,
$10.50 A BEAR, THAT WAS THE
$10.50 A BEAR, THAT WAS THE
LOWEST SINCE 1986.
LOWEST SINCE 1986.
RONALD REAGAN WAS PRESIDENT THEN
RONALD REAGAN WAS PRESIDENT THEN
THIS HAS SPILL OVER EFFECT NOT
THIS HAS SPILL OVER EFFECT NOT
ONLY ON EXXON AND CHEVRON, NOT
ONLY ON EXXON AND CHEVRON, NOT
ONLY ENERGY RELATED PLAYERS,
ONLY ENERGY RELATED PLAYERS,
SCHLUMBERGER, CONOCOPHILLIPS,
SCHLUMBERGER, CONOCOPHILLIPS,
PHILLIPS 66, VALERO, DEVON
PHILLIPS 66, VALERO, DEVON
ENERGY, ON AND ON IT GOES.
ENERGY, ON AND ON IT GOES.
CHEMICAL PLAYERS AND THE REST
CHEMICAL PLAYERS AND THE REST
THAT RELY ON THIS, THOSE COSTS
THAT RELY ON THIS, THOSE COSTS
GO DOWN THEY MIGHT BE
GO DOWN THEY MIGHT BE
BENEFICIARIES BUT VERY FEW
BENEFICIARIES BUT VERY FEW
BENEFICIARIES TO BE SEEN OR HAD
BENEFICIARIES TO BE SEEN OR HAD
TODAY.
TODAY.
ALTHOUGH I STRESS WE’RE WELL OFF
ALTHOUGH I STRESS WE’RE WELL OFF
OUR LOWS.
OUR LOWS.
THIS SEEMS TO BE EVEN IN THE
THIS SEEMS TO BE EVEN IN THE
FACE OF OPEC AND OPEC ANCILLARY
FACE OF OPEC AND OPEC ANCILLARY
PLAYERS, THE SO-CALLED PLUS
PLAYERS, THE SO-CALLED PLUS
PLAYERS, ACREEING TO CUT
PLAYERS, ACREEING TO CUT
PRODUCTION BY UPWARDS TO
PRODUCTION BY UPWARDS TO
20 MILLION BARRELS A DAY.
20 MILLION BARRELS A DAY.
TO PHIL FLYNN NOW.
TO PHIL FLYNN NOW.
PHIL, THE PROBLEM WAS EVEN
PHIL, THE PROBLEM WAS EVEN
CUTTING 20 MILLION BARRELS A DAY
CUTTING 20 MILLION BARRELS A DAY
IF IT WERE EVER PAST DOESN’T
IF IT WERE EVER PAST DOESN’T
COME CLOSE TO THE LOST DEMAND
COME CLOSE TO THE LOST DEMAND
WE’RE LOOKING AT, RIGHT?
WE’RE LOOKING AT, RIGHT?
>> ABSOLUTELY CORRECT AND THE
>> ABSOLUTELY CORRECT AND THE
THING YOU HAVE TO REALIZE TOO,
THING YOU HAVE TO REALIZE TOO,
THE CONTRACT WE’RE LOOKING AT,
THE CONTRACT WE’RE LOOKING AT,
THE MAY CONTRACT THAT EXPIRES
THE MAY CONTRACT THAT EXPIRES
TOMORROW, IT IS NOT COMING FAST
TOMORROW, IT IS NOT COMING FAST
ENOUGH.
ENOUGH.
THE OPEC PRODUCTION CUTS HAVE
THE OPEC PRODUCTION CUTS HAVE
NOT EVEN STARTED.
NOT EVEN STARTED.
THEY DON’T START UNTIL MAY
THEY DON’T START UNTIL MAY
1st.
1st.
SO IF YOU’RE GETTING OIL TODAY
SO IF YOU’RE GETTING OIL TODAY
THERE IS NO PLACE TO PUT IT.
THERE IS NO PLACE TO PUT IT.
THAT IS WHY WE’RE SEEING THIS
THAT IS WHY WE’RE SEEING THIS
INCREDIBLE SELL OFF.
INCREDIBLE SELL OFF.
WE’RE GOING BACK TO LOOK IN THE
WE’RE GOING BACK TO LOOK IN THE
HISTORY BOOKS THIS I TODAY,
HISTORY BOOKS THIS I TODAY,
NEIL, MAYBE 25, 50 YEARS FROM
NEIL, MAYBE 25, 50 YEARS FROM
NOW, AS AN EXAMPLE WHAT CAN
NOW, AS AN EXAMPLE WHAT CAN
HAPPEN TO A MARKET WHEN
HAPPEN TO A MARKET WHEN
EVERYTHING GOES WRONG.
EVERYTHING GOES WRONG.
THIS IS GOING TO BE THE BIGGEST
THIS IS GOING TO BE THE BIGGEST
SELL OFF IN CRUDE OIL HISTORY
SELL OFF IN CRUDE OIL HISTORY
BECAUSE ONE DAY MOVE RIGHT NOW I
BECAUSE ONE DAY MOVE RIGHT NOW I
THINK WE’RE DOWN OVER 44% IN ONE
THINK WE’RE DOWN OVER 44% IN ONE
DAY.
DAY.
AND IT IS REALLY COMBINATION OF
AND IT IS REALLY COMBINATION OF
RIGHT NOW.
RIGHT NOW.
DELIVERY IS COMING DUE.
DELIVERY IS COMING DUE.
NOBODY WANTS THE OIL.
NOBODY WANTS THE OIL.
THERE IS TOO MUCH OIL OUT THERE.
THERE IS TOO MUCH OIL OUT THERE.
SO THEY CAN’T GIVE IT AWAY RIGHT
SO THEY CAN’T GIVE IT AWAY RIGHT
NOW.
NOW.
THAT IS WHY THE PRICES ARE
THAT IS WHY THE PRICES ARE
COLLAPSING.
COLLAPSING.
NEIL: WHAT WAS THE SIGNIFICANCE
NEIL: WHAT WAS THE SIGNIFICANCE
TODAY THOUGH, PHIL?
TODAY THOUGH, PHIL?
WE KNEW ABOUT THE BROAD MACRO,
WE KNEW ABOUT THE BROAD MACRO,
YOU KNOW, DISMAL REALITIES BUT
YOU KNOW, DISMAL REALITIES BUT
WHAT HAPPENED TODAY?
WHAT HAPPENED TODAY?
>> I THINK IT WAS OPTIMISM THAT
>> I THINK IT WAS OPTIMISM THAT
THE OPEC PRODUCTION CUTS WHERE
THE OPEC PRODUCTION CUTS WHERE
WE WOULD START TO SEE SOME
WE WOULD START TO SEE SOME
DEMAND SAVED THIS MARKET FROM
DEMAND SAVED THIS MARKET FROM
THIS, THIS WASH OUT.
THIS, THIS WASH OUT.
TO BE HONEST WITH YOU.
TO BE HONEST WITH YOU.
IF YOU GO BACK, LOOK EVEN A
IF YOU GO BACK, LOOK EVEN A
COUPLE MONTHS OUT, THERE IS A
COUPLE MONTHS OUT, THERE IS A
LOT OF OPTIMISM THAT THE OIL
LOT OF OPTIMISM THAT THE OIL
PRICES ARE GOING TO GET BETTER.
PRICES ARE GOING TO GET BETTER.
WE’RE GOING TO SEE PRODUCTION
WE’RE GOING TO SEE PRODUCTION
FALL AT A RECORD PACE.
FALL AT A RECORD PACE.
WE’LL SEE PEOPLE SHUT IN WELLS
WE’LL SEE PEOPLE SHUT IN WELLS
HERE IN THE UNITED STATES.
HERE IN THE UNITED STATES.
SO WE KNOW PRODUCTION IS GOING
SO WE KNOW PRODUCTION IS GOING
TO GET WORSE.
TO GET WORSE.
THE BIG QUESTION IS, WHEN WILL
THE BIG QUESTION IS, WHEN WILL
DEMAND COME BACK?
DEMAND COME BACK?
AS YOU CAN SEE IN THE STOCK
AS YOU CAN SEE IN THE STOCK
MARKET, WE’RE SEEING A LITTLE
MARKET, WE’RE SEEING A LITTLE
BIT OF OPTIMISM, MAYBE DEMAND
BIT OF OPTIMISM, MAYBE DEMAND
WILL COME BACK.
WILL COME BACK.
SOME COMPANIES WILL GET BACK TO
SOME COMPANIES WILL GET BACK TO
WORK SLOWLY BUT SURELY.
WORK SLOWLY BUT SURELY.
BUT IT DOESN’T MATTER.
BUT IT DOESN’T MATTER.
IF YOU HAVE TO DELIVER OIL
IF YOU HAVE TO DELIVER OIL
TOMORROW, YOU’RE IN TROUBLE
TOMORROW, YOU’RE IN TROUBLE
BECAUSE ALL OF THOSE GOOD THINGS
BECAUSE ALL OF THOSE GOOD THINGS
AREN’T GOING TO HAPPEN FAST
AREN’T GOING TO HAPPEN FAST
ENOUGH TO SAVE THE DAY AT THE
ENOUGH TO SAVE THE DAY AT THE
LAST MINUTE.
LAST MINUTE.
NEIL: YOU KNOW, IT IS AN OUTSIDE
NEIL: YOU KNOW, IT IS AN OUTSIDE
ISSUE BUT IT IS INTRIGUING TO ME
ISSUE BUT IT IS INTRIGUING TO ME
TO KNOW THAT GOLD IS UP TODAY.
TO KNOW THAT GOLD IS UP TODAY.
IT HAS HAD A VERY GOOD YEAR.
IT HAS HAD A VERY GOOD YEAR.
IT IS UP CLOSE TO 20% ON THE
IT IS UP CLOSE TO 20% ON THE
YEAR IN THE FACE OF THIS RAPID
YEAR IN THE FACE OF THIS RAPID
DECLINE IN OIL PRICES.
DECLINE IN OIL PRICES.
NORMALLY, NOT ALL THE TIME YOU
NORMALLY, NOT ALL THE TIME YOU
REMIND ME THEY’RE KIND OF IN
REMIND ME THEY’RE KIND OF IN
TANDEM BUT THEY’RE NOT NOW.
TANDEM BUT THEY’RE NOT NOW.
WHAT DO YOU MAKE OF THAT?
WHAT DO YOU MAKE OF THAT?
>> NO, THEY’RE NOT.
>> NO, THEY’RE NOT.
I TELL YOU, GOLD IS IN A
I TELL YOU, GOLD IS IN A
SITUATION WHERE IT IS MORE AND
SITUATION WHERE IT IS MORE AND
MORE GOING TO BECOME LIKE A
MORE GOING TO BECOME LIKE A
CURRENCY.
CURRENCY.
WHAT WE’RE GOING TO SEE BECAUSE
WHAT WE’RE GOING TO SEE BECAUSE
OF HISTORIC QUANTITATIVE EASING
OF HISTORIC QUANTITATIVE EASING
AROUND THE GLOBE, EVERYBODY WILL
AROUND THE GLOBE, EVERYBODY WILL
PRINT MONEY TO SAVE THE ECONOMY,
PRINT MONEY TO SAVE THE ECONOMY,
GOLD WILL BE THAT SAFE HAVEN.
GOLD WILL BE THAT SAFE HAVEN.
GOLD, YOU ALWAYS HAVE THE
GOLD, YOU ALWAYS HAVE THE
BALANCE, NEIL, AS WE TALKED
BALANCE, NEIL, AS WE TALKED
ABOUT BEFORE, THE BALANCE OF
ABOUT BEFORE, THE BALANCE OF
GOLD BEING A SAFE HAVEN AGAINST
GOLD BEING A SAFE HAVEN AGAINST
A FOREIGN CURRENCY, BUT ALSO A
A FOREIGN CURRENCY, BUT ALSO A
COMMODITY THAT CAN BE IMPACTED
COMMODITY THAT CAN BE IMPACTED
BY A SLOWDOWN IN DEMAND.
BY A SLOWDOWN IN DEMAND.
IF THE ECONOMY REALLY PULLS
IF THE ECONOMY REALLY PULLS
BACK, YOU DON’T GET AS MUCH
BACK, YOU DON’T GET AS MUCH
PHYSICAL BUYING FOR GOLD.
PHYSICAL BUYING FOR GOLD.
IT IS REALLY A MARKET THAT YOU
IT IS REALLY A MARKET THAT YOU
REALLY HAVE TO JUDGE THE MOOD ON
REALLY HAVE TO JUDGE THE MOOD ON
A DAY-TO-DAY BASIS.
A DAY-TO-DAY BASIS.
BUT I’LL TELL YOU THIS, I MEAN,
BUT I’LL TELL YOU THIS, I MEAN,
FROM A LONG-TERM PERSPECTIVE,
FROM A LONG-TERM PERSPECTIVE,
GOLD LOOKS VERY BULLISH AT THIS
GOLD LOOKS VERY BULLISH AT THIS
POINT.
POINT.
YOU HAVE TO GO BACK TO THE LAST
YOU HAVE TO GO BACK TO THE LAST
TIME WE DID AS MUCH QUANTITATIVE
TIME WE DID AS MUCH QUANTITATIVE
EASING DURING THE FINANCIAL
EASING DURING THE FINANCIAL
CRISIS.
CRISIS.
YOU KNOW GOLD PRICES INITIALLY
YOU KNOW GOLD PRICES INITIALLY
COLLAPSED, WENT DOWN TO $666 AN
COLLAPSED, WENT DOWN TO $666 AN
OUNCE, ONLY TO TURN AROUND TO GO
OUNCE, ONLY TO TURN AROUND TO GO
BACK TO ALL-TIME HIGHS IN A
BACK TO ALL-TIME HIGHS IN A
COUPLE OF YEARS BECAUSE
COUPLE OF YEARS BECAUSE
ULTIMATELY, WHEN YOU PRINT A LOT
ULTIMATELY, WHEN YOU PRINT A LOT
OF MONEY WHICH THE WORLD IS
OF MONEY WHICH THE WORLD IS
DOING RIGHT NOW, IT WILL BE VERY
DOING RIGHT NOW, IT WILL BE VERY
SUPPORTIVE FOR GOLD.
SUPPORTIVE FOR GOLD.
ON A DAY-TO-DAY BASIS YOU WILL
ON A DAY-TO-DAY BASIS YOU WILL
SEE SOME STRONG FLUCTUATIONS BUT
SEE SOME STRONG FLUCTUATIONS BUT
WE’LL PROBABLY SEE ALL-TIME
WE’LL PROBABLY SEE ALL-TIME
HIGHS IN GOLD BEFORE THIS IS ALL
HIGHS IN GOLD BEFORE THIS IS ALL
SAID AND DONE.
SAID AND DONE.
NEIL: ALL RIGHT.
