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🛢️ The OPEC+ Ouching
Plus Attorney Generals Call Out ESG Gaslighting

Good morning; have a wonderful Memorial Day weekend. We’ll see you again on Tuesday.
Here's what the Oilman has for you today:
Alabama AG Slams Legislators’ ESG Gaslighting
The OPEC+ Ouching Gambit
Tweet of the Day

Alabama AG Slams Legislators’ ESG Gaslighting
Legislators are trying to manipulate the meaning of free market to get it to mean the exact opposite, the Alabama Attorney General Steve Marshall says.
In an op-ed piece for the Wall Street Journal, Marshall slammed some Congressmen for using the concept of a free market to push the energy transition agenda.
States against ESG investing
Marshall says that during a hearing in front of the House Oversight Committee, Rep. Jamie Ruskin and Rep. Katie Porter tried to argue that ESG investing was something created by the free market.
Hahahahahaha.
They also argued that Marshall himself and the Utah Attorney General Sean Reyes were “assaulting the free market” and attempting to “stop the market from responding to the climate crisis.”
Lololololol.
Here’s why: Alabama is one of the states that have passed anti-ESG investing legislation.
Ah, now we get it...
There are several states doing this on the basis that ESG investing discriminates against the oil and gas industry.
Which it does.
It’s part of the definition.
Is it a free market when the government sets the tune?
Let’s say Alabama, Utah, and others are “assaulting the free markets” by banning companies from discriminating against industries.
But then, what is the federal government doing with those close to $400 billion in direct subsidies for certain industries but not for others?
That’s not very free markety, is it? Yes, the Oilman just made up a word there.
Neither is banning gas stoves and heating systems.
And neither is banning gasoline cars to force EV adoption.
There is nothing capitalist or free-market about any of this...

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The OPEC+ Ouching Gambit
"Speculators, like in any market, they are there to stay; I keep advising them that they will be ouching; they did ouch in April; I don't have to show my cards I'm not a poker player... but I would just tell them watch out."
That’s what Saudi Energy Minister Abdulaziz bin Salman said this week in Qatar, suggesting the cartel may cut more output.
Putting your barrels where your mouth is
The last “ouching” that took place among short sellers was a result of the surprise decision by OPEC+ to cut production in April.
If they cut now, short sellers would feel the pain.
So far, so clear. But there’s a twist.
Now OPEC+ has to cut output.
Because otherwise, prices will take a plunge, and short sellers will celebrate.
Talk about a risky bluff.
Agreed. “I don’t have to show my cards. I’m not a poker player,” is a telling quote from Prince Abdul Aziz.
— Matt Reed (@matthewmreed)
9:38 PM • May 25, 2023
There may be more to the story
When OPEC+ announced its surprise cuts of more than 1 million bpd in April, many missed an important detail.
The actual cuts were much smaller.
Several OPEC members were already producing less than they had to, under their quotas.
The cuts basically bridged the gap between output quotas and actual production.
But there’s a bigger problem that can send prices soaring.
The name of this problem is limited growth capacity.
OPEC has been banging the drum about it for a couple of years.
Major consumers are too busy counting their emissions to pay attention.
And U.S. drilling is slowing down.
Global supply of oil is tightening.
If OPEC+ announces further cuts now, they will be real cuts.
There’s going to be “ouching” all right.

Around the Global Patch
🇧🇷 Major oil strike: Brazil uncovers new reserves in active field.
🇯🇵 Court clears path for nuclear power restart in Japan.
🇷🇺 Russian mining giant: half of revenue now comes from Asia.

Tweet of the Day
Curious person: “What’s oil and gas like?”
Me:
— Oil Mutt 🛢️🛢️🛢️ (@oilmutt)
4:46 PM • May 25, 2023

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