Popular Expectations About BRICS’ New Currency Project Should Be Tempered
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Highlights of the Podcast
00:00 – Intro
00:45 – Popular expectations about BRICS new currency project could be tempered
03:00 – The Dallas Fed Survey
08:30 – Mexico Considering Joining BRICS As Relationships Weaken Under Biden
12:57 – California lawmakers stand up to big oil by passing a bill that start allows fines for price gouging at the pump
15:34 – Why Minnesota’s push to electrify government vehicles is going slower than expected.
18:23 – Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:00:15] What’s going on? Everybody, Welcome to a special edition of the Daily Energy News Beat Stand up here on this gorgeous Friday, April 7th, 2023. I am your humble correspondent, Michael Tanner. [00:00:25][10.1]
Michael Tanner: [00:00:26] Kind of on vacation this week, but I am back and Stu and I are back in full force next week. Up next, we’ve got our weekly roundup with our top stories. We appreciate you guys checking this out we will be in the shop a Sunday afternoon, cutting up something and get you going for next week, guys but we appreciate it. Enjoy the show. We’ll see you next week. [00:00:43][16.9]
Stuart Turley: [00:00:44] Popular expectations about BRICS new currency project could be tempered, if anybody doesn’t know what bricks they’ve heard the show bricks is. Brazil, Russia, India, China and one other one. And so but these are countries that are starting up a new financial arrangement and it’s going to be around the world’s swift financial institution. [00:01:14][30.3]
Stuart Turley: [00:01:15] So BRICS is arranging for oil, changing hands, all natural gas changing hands. The first China to Brazil, LNG just recently happened. So this is moving away from the petrodollar and it is very, very important that we pay attention to this all of this could have been avoided. [00:01:41][26.2]
Stuart Turley: [00:01:42] So well after all, this is out of the article from Andrew. After all, it’s unrealistic to imagine China and the Global South fully decoupling from the West. Hence why predictions about the dollar’s death in light of the latest update about BRICS as new currency is premature and most likely won’t ever come to fruition in any case. [00:02:05][23.5]
Stuart Turley: [00:02:06] At most, as was explained, the dollar’s influence outside the golden billion will recede relatively to the present, but it won’t stop circulating across the world since all BRICS states apart from Russia will use it in their trade with the U.S. [00:02:23][16.8]
Stuart Turley: [00:02:24] That is critical to think about. Russia has insulated itself away from U.S. sanctions. U.S. sanctions have then caused the demise of the dollar China, Iraq, Iran, Saudi Arabia, India. All of those countries are really lining up right now to try to get into BRICS. It is just amazing to see how many people are trying to get energy away from the U.S. dollar. If that is holy smokes, could be a rough one. [00:02:59][35.3]
Stuart Turley: [00:02:59] The Dallas Fed Survey Oil and Gas Expansion Stalls amid surging cost and worsening Outlook. Michael it was really pretty interesting on the Dallas Fed. I always liked reading they have some great articles. [00:03:15][15.3]
Stuart Turley: [00:03:15] Oil and natural gas production increased at a slower pace compared with the prior quarter, according to executives at exploration and production. EMP firmed the oil production index remain positive, but declined to 10.5 in the first quarter from two 25.8 in the fourth quarter. [00:03:38][22.6]
Stuart Turley: [00:03:39] And so they’re in here and you and I both know the costs for drilling rigs is gone through the roof. Firms are reporting rising costs for a ninth consecutive quarter is one of the biggest things. [00:03:53][14.6]
Michael Tanner: [00:03:54] For natural gas the index fell from 29.4 to 7.4. What was that, 7.4? I really want to know who that 7.4 is, Who those last little people hanging on, running models with their $2 natural gas strip price and like. I think we’re going to keep drilling. [00:04:11][17.0]
Stuart Turley: [00:04:12] Oh, yeah. Somebody from Jp Morgan. [00:04:14][1.6]
Michael Tanner: [00:04:15] Heroes! That 7.4 You are heroes in my book. I think this is also interesting respond to that. There’s a couple of interesting indexes here first off, I’m going to read you the current. I’m just going to read you the current index, and then I want you to try to guess what the previous index was. [00:04:32][17.6]
Stuart Turley: [00:04:33] Okay. [00:04:33][0.0]
Michael Tanner: [00:04:34] Fun little game, Fun little game. Let’s start off with uncertainty the current index was 62.60, really High. What do you think it was last quarter? [00:04:45][11.3]
Stuart Turley: [00:04:46] 51 [00:04:46][0.0]
Michael Tanner: [00:04:47] 40.1. 68% of people report an increase in uncertainty well, that’s not good ooh, that’s not good. I thought this was interesting. We’ve got the natural gas wellhead production, employment or employee hours current index, 10.5. Wow. They don’t think anybody really works it. 10.5. [00:05:06][18.5]
Stuart Turley: [00:05:07] Wow. [00:05:07][0.0]
Michael Tanner: [00:05:08] They don’t think anybody. What do you think it was last quarter? [00:05:10][2.1]
Stuart Turley: [00:05:11] Seven. [00:05:11][0.0]
Michael Tanner: [00:05:12] 16.4. So maybe they really were getting worse only 13.7% of responders say it was increased. No change, 83.2 reporting a decrease. 13.2 mean. No, they don’t think anybody’s working. [00:05:24][12.8]
Stuart Turley: [00:05:25] No. [00:05:25][0.0]
Michael Tanner: [00:05:26] I thought this was interesting. Company Outlook. Current index -18.9. What do you think it was last quarter? [00:05:34][8.4]
Stuart Turley: [00:05:36] I do not even know. [00:05:37][1.4]
Michael Tanner: [00:05:38] 6.5. 16%. 16.7% of people thought it reported that it was that it improved. 47.8 reported no change and 35.6% thought it was worse and that’s 16% still living. How do you think your how do you think oil going from 120 to 60 and you felt you feel better about your company’s outlook? I want to work at that company I hope they’re hiring. I thought this was interesting operating margin current index 1.9. What do you think it was last quarter? [00:06:14][36.4]
Stuart Turley: [00:06:15] 2.3. [00:06:15][0.0]
Michael Tanner: [00:06:16] 25.9. Oh, that. No, I saved that one for last because I think that’s a sign of Q1 earnings. If there was ever a little tidbit where I think Q1 earnings is going, it’s in this tidbit right here. Operating margin. Unbelievable. [00:06:35][18.8]
Stuart Turley: [00:06:36] Wow. That’s an eye opener. [00:06:38][1.7]
Michael Tanner: [00:06:39] And that’s for oilfield service companies. So, I mean, they’re getting squeezed. Squeezed, I think Q1 earnings oilfield operators or service companies is not going to be as good as what you think it is. [00:06:50][11.2]
Stuart Turley: [00:06:51] No, and I think only the ones with good management will be able to squeak their numbers by good management good numbers. And it’s going to be. I got a.. [00:06:59][8.7]
Michael Tanner: [00:07:00] Liberty will be on track you know, Hall Berg will lose a bunch of money. You know, we’ll lose a bunch of money on new tax. [00:07:07][7.3]
Stuart Turley: [00:07:08] The managers over it at Liberty they watch it like the numbers, like off the mark. I mean, I mean, it’s amazing what they do. I mean, a week goes by and if there’s a bourbon, those waters just they’re on them. [00:07:24][15.8]
Michael Tanner: [00:07:24] Well, they’re not busy rebranding their corporate brand, like Schlumberger is like they’ve got bigger fish to fry, like worrying about their operating margin, which, according to this survey, is near zero. [00:07:35][10.9]
Stuart Turley: [00:07:36] Oh, man. Let’s go to this one here. Mexico. Are you done on that? [00:07:42][5.9]
Michael Tanner: [00:07:43] Yeah. I just thought it was an absolutely the dead fellas we could spend years talking about the Dow Switzer. I think there’s one take away the future for oil and gas is choppy. People feel very mixed and I think Q1 earnings is going to be spicy!!! [00:07:58][15.0]
Stuart Turley: [00:08:00] I think for if the rest of the year, they did say in the Dallas Fed that they think WTI will be 80 by the end of the year for the rest of the year. I can agree with that as an average, I think WTI will range between 80 and 92. If I had to do a crayon math just based off of what I know, but that could be totally wrong. I can’t even predict, you know what I’m going to have for breakfast tomorrow. [00:08:27][26.9]
Stuart Turley: [00:08:28] Mexico Considering Joining BRICS As Relationships Weaken Under Biden, U.S. dollar is facing a new emerging threat as the BRICS group Brazil, Russia, India, China and South Africa is seeking to add more countries and imposing a force on the United States financial security. Mexico is now rumored to be interested in joining the coalition, according to a new report. [00:09:00][31.4]
Stuart Turley: [00:09:01] The BRICS countries are recognized for their significant influence in regional and global affairs. They represent about 41% of the world’s population and 24% of the world’s GDP and 16% of the world’s trade. This is a holy cow Batman moment. [00:09:28][27.6]
Michael Tanner: [00:09:29] I think Mexico has a very compelling case to join BRICS. If you’re sitting back in your drafting countries, if you’re the BRICS leadership, you probably want Mexico. Big population, diverse, hard workers. Well, a lot of Oil and Gas. [00:09:41][12.0]
Stuart Turley: [00:09:42] And open to the border to the United States. [00:09:45][2.5]
Michael Tanner: [00:09:45] Your right yah open border. [00:09:47][1.5]
Stuart Turley: [00:09:47] Open border and it it is Russia will be in there as well. If Russia has a say in it, yes, BRICS will be approved immediately with Russia’s help. Oops. [00:10:02][14.8]
Michael Tanner: [00:10:03] Yeah. [00:10:03][0.0]
Stuart Turley: [00:10:04] This is huge the President Biden and the administration brought this on by a horrible global. Geopolitical. Unbelievable. [00:10:16][11.8]
Michael Tanner: [00:10:18] Shocking take from you that you would blame Biden on this one. Shocking take. My is when are they going to add new countries? [00:10:23][5.2]
Stuart Turley: [00:10:24] Soon. They’ll be meeting very soon they’ve been meeting for like monthly for. [00:10:28][4.0]
Michael Tanner: [00:10:28] So like this summer will know? [00:10:30][1.2]
Stuart Turley: [00:10:30] Very easily and you’ll you will see the petro dollar is already going south. [00:10:37][7.1]
Michael Tanner: [00:10:39] Yeah I know Ive Been hearing a lot. [00:10:39][0.8]
Stuart Turley: [00:10:40] Oh, hey, whoa, whoa, whoa, whoa whoa, whoa. LNG is already being traded by Brazil to China in Yuan. You already have India, Russia, you already have Iran, you have Iraq, all trading outside the petro dollar. It’s here. [00:10:58][18.0]
Michael Tanner: [00:10:58] Know that it is here. It’s. It’s. It’s definitely here. All I guess my I think I think we save this for another show but I think the real question is, what does that mean? What does that mean? What does that actually mean? That if we start trading oil and gas in one of these open ended question, what does it mean? [00:11:19][20.6]
Stuart Turley: [00:11:20] Well, it’s going to mean two things and I don’t know the answer to this. I’ve asked the question I can’t get an answer on it, to a lot of industry folks around the world. And that is will OPEC lose control over the pricing metric. I mean, they can sit there and say our production, but if BRICS is actually buying outside of the production and the petro dollar and I know you’re going to laugh, I know you’re going to laugh, but the Dark fleet, all of that is outside of the OPEC,. [00:11:56][35.6]
Michael Tanner: [00:11:56] The Dark Fleet. The Dark Fleet. Darkness. It is. [00:12:02][5.4]
Stuart Turley: [00:12:02] I mean. [00:12:02][0.1]
Michael Tanner: [00:12:03] I think I think you’re right. I just I don’t know. I pause in say every other country exists by not having their currency be pegged to oil. So we will survive as a nation without being pegged to oil so it’s not the death to America. [00:12:19][16.6]
Stuart Turley: [00:12:20] No, it’s not death but financially, by printing money, we owe, what, $32 ,$36 trillion in our debt. We’ve passed. [00:12:29][8.8]
Michael Tanner: [00:12:30] Trillion between friends. [00:12:30][0.7]
Stuart Turley: [00:12:31] Oh, you know, and you and I started years ago going, what’s a few billion now? It’s what is it? You trillion between friends. Nobody even can imagine what $1,000,000,000,000 is. But. [00:12:40][9.4]
Michael Tanner: [00:12:41] If you would like to give me $1,000,000,000,000, though? I’ll let you know how it feels. So happy, Happy to partake. [00:12:45][4.3]
Stuart Turley: [00:12:46] I’d be thrilled to pay taxes on that I’d even pay half give me half a trillion and I pay half of today. [00:12:51][5.6]
Michael Tanner: [00:12:52] I’d pay 90%. Bernie. [00:12:53][1.0]
Stuart Turley: [00:12:53] I’d still be happy. California lawmakers stand up to big oil by passing a bill that start allows fines for price gouging at the pump. There are some critical points in here. Democratic Governor Gavin Newsom used his political muscle to pass the bill, which grew out of his call last December for a special legislative session to pass a new tax on oil company profits after the average price in California hit a record high of 644 per gallon. [00:13:27][33.1]
Stuart Turley: [00:13:28] Taking on the oil industry has been a major priority for Newsom, who is widely viewed as a future presidential candidate. When you take on big oil, they usually roll you. That’s exactly what we’ve been doing to customers for years and years, Newsom told reporters after the vote. [00:13:47][19.2]
Stuart Turley: [00:13:48] The legislature had the courage and the conviction and the backbone to stand up to big oil. Here’s where this legislation comes in. It is going after the profits, not through a profits tax, but rather being able to phrase it as a price gouging. [00:14:09][21.8]
Stuart Turley: [00:14:10] So it is not a tax, but it is a referendum against price gouging. Here’s the problem there is no price gouging from the oil companies perspective. And I would invite anyone to come on to the show and explain it any way differently than that. [00:14:30][19.9]
Stuart Turley: [00:14:31] You have the oil companies at the pump those individual owners are paying. They are making very little on a gallon of gas it is not them. So when they sit back and say it’s going to be profits, another quote in the article is we’re not like Texas, we’re not like Louisiana, we’re not like the Northeast Garcia says we do not have fungible fuel supply, and we’ve chosen to do we’ve set ourselves up by 30 years of public policy. [00:15:03][32.6]
Stuart Turley: [00:15:04] This sends a clear message Don’t invest in California, they have. The third largest gasoline market. But yet, like Mike Rowe out in California has been saying, they’re killing the oil and gas market, but yet they’re importing it in from everywhere else. Bad management, bad numbers, and the consumers are going to end up paying for this. [00:15:32][28.2]
Stuart Turley: [00:15:34] Why Minnesota’s push to electrify government vehicles is going slower than expected. You know, it is really a great goal by the government of Minnesota to try to electrify their vehicles. I have to hand it to them. And when you do say they in Minnesota, Department of Administration sets a target in 2020 to make 20% of its vehicle fleet electric by 2027, that is almost impossible when you consider the state also has snow plows. [00:16:04][30.2]
Stuart Turley: [00:16:04] They have all these kind of trucks and they were only going after the original, the small trucks, cars and hybrids. This is some really good thinking on their part. In 2021, the state’s light duty category was dominated by flex fuel vehicles capable of running on high ethanol blends, accounting for 55%. [00:16:27][23.1]
Stuart Turley: [00:16:29] Hybrids followed at 22% and regular internal combustion at 15% the rest were electric plug in hybrid and diesel run models. I got to hand it to the city not often do we hear the plans of hybrids. I love hybrids. I love the plug in hybrid, especially because you are able to run fossil fuels, get the benefit of high, high gasoline mileage. But yet you’re not using all of the battery technology and critical minerals that you need. [00:17:04][34.9]
Stuart Turley: [00:17:04] So my hat’s off to them for trying but I also have to hand it to them that they’re admitting that it is going to be tough. So when we sit back and take a look at the quotes, our plow trucks have to be run and run 24 hours a day. [00:17:19][14.8]
Stuart Turley: [00:17:20] So there’s a lot of technology to crack before they can even use those in the batteries. I have to hand it to them. And again, hats off to Minnesota and they are going to continue to go down that road getting the charging stations for a city or a municipality or a state facility is a lot easier than the consumer because the states can then put the charging facilities in the parking lots or at the offices of those buildings. But it’s not the same for housing, apartment complexes, or those others. So that’s why I personally like the hybrids and the ability to do that. [00:18:03][43.3]
Michael Tanner: [00:18:04] Another great show Appreciate our Production staff, Andy in particular, who puts these together. We appreciate all your hard work and the rest of the staff guys, we will see you again on Monday. Have fun. [00:18:04][0.0]
