“Sleepwalking into Crisis”: Why The Oil Market Hasn’t Imploded Yet | Kpler’s Matt Smith

Today's episode is brought to you by the Tukurium Corn Fund ticker, C-O-R-N. Let's get into it. Got a very important conversation today. I'm joined by Matt Smith, Director of Research at Kepler, which is a research platform focused on commodities, particularly energy. Matt, welcome to monetary matters. Yeah, thank you for having me. It's my pleasure. So Matt, as we record here in June, we're four months into the Iran War conflict. The Street of Hormuz has been closed for that period of time. So where do things stand? I mean, is the world running out of oil? And if it's not running out of oil, why? What's going on? We've had the Street of Hormuz essentially closed for over three months now. You've had about 15 million barrels a day of exports that would be leaving in terms of crude. You can add on another five million barrels a day onto that in terms of products. So that's jet fuel gasoline, diesel, LPGs. That's not leaving. Some of the crude has been able to be rerouted. But that's only the stuff from Saudi Arabia, a little bit from Fajira, maybe four million barrels a day, something like that. So for all intents and purposes, you've had this huge chunk of supply taken out of the market. The way that I kind of look at it simplistically, Jack, is that if we have supply and it's down about 11 million barrels per day over the last average, over the last three months, which is basically all those midi-scale producers that have had to throttle back on their production, we have lost 11 million barrels a day on that side. To offset that, we have seen about 9 million barrels a day of refinery runs being cut on a global basis. So that's what, and then the difference in between the two million barrels a day is inventory draws. So the market is looking at things and saying, we've lost all this supply. Inventories are falling, but not really that much. And they're very kind of centered around the countries that are doing strategic petroleum releases. But the big crux of the situation is you've got refineries that are down 9 million barrels a day. So you're not having 9 million barrels a day hitting the market here of products. So refineries take crude oil and they produce jet fuel, caracene gasoline, the things that human beings and the economy actually use. So you know, there's, you don't really use crude oil basically for anything, you they refine it into these products. So if the refineries have cut 9 million barrels of consumption of crude oil a day to produce the products, does that indicate what's happened to the 9 million effective barrels of refined products have draw downs and stockpiles of those refined products gone down or has there been demand destruction indicating that actually like the market has adjusted just by not consuming. - So it's a bit of both. So you have had some demand destruction in that it's been implemented by governments with that particularly like in Asia in terms of rationing or conservation measures. So that's happening, but that's a very small piece of it. We are not at the point here where oil prices or product prices are so high that they are they are killing demands. They probably need to be, but they are not, right? So you have that piece of it, then you have these countries. So when we think about the immediate impact it's been 90% of the crude that leaves from the straighter hormones goes into Asia. They've lost those flows for the most part. We've seen some, you know, the rerouting in that, but essentially then Asia's not getting as much crude as it needs to be able to refine. So they're dialing back on those refinery runs and they are dialing back on exports as well. So we're not seeing those countries exporting the products. And so it's kind of like a series of dominoes here. The biggest challenge that we face is that we are likely seeing inventory draws on the product side of things, you know, pay carriers and we just cannot see that right now. What does that mean? Sorry. So it's in countries where we don't have access to be able to track those inventories. So that's, you know, you could go in agencies that, yeah, provide that. So China, you're saying China is drawing down its stockpiles, but you don't have access to that data. No one does. China is very likely drawing down. Yeah, it's products inventories. And China's a wild one in itself, right? In that China is the largest consumer, or largest importer of crude imports about 11 million barrels per day there. And then suddenly they've just halted their buying, right? And maybe just even three, four weeks ago, we were thinking, perhaps they're drawing from storage that we cannot see. They're drawing from these caverns that they've filled up. But it turns out that they have just really dialed back on their refinery runs. And so what that has meant is the four and a half million barrels a day that they were previously importing that they are not anymore has been made available in the rest of the market, even barrels that they had bought off West Africa, they have resold. So that has essentially provided four and a half million barrels a day of supply to the market that it wasn't otherwise expecting. Again, though, there's ramifications to that too, right? China can't stay out of the market for that long. But they're onshore crude inventories. We're not seeing those dropping. So if those aren't dropping, they have to be cutting their refinery runs and dining back their domestic demand. How many months supply left of refined products are left? So not crude oil, but the drawdowns of the refined products that are going down and dwindling because China's stopping the refinery, other companies stopping the refining of crude oil. How many months left of supply do we have? So the best way to do this is to look at the US. And reason for that is because the US is the largest market in the world, it accounts for about 20% of global demand, 20 million barrels a day. The US is also the most timely market and most transparent because we get this report comes out every Wednesday morning from the EIA, which tells us where those inventories are. The US is in the best situation now of probably any country in the world in that we have refining capacity of about, well, we're refining about 17 million barrels a day right now. We have production of nearly 14 million barrels a day. And so we have the resources. And we're not self-sufficient, right? But we're producing a lot of the gasoline, diesel that we need. But because of that, and because the rest of the world is so tight on supply for these refined products, all of these barrels are just getting pulled out of the US. So if we look at Europe, Europe was getting about 45%, half of its jet fuel needs from the Middle East. Those stopped with the straighter hot moves. It goes to the market, looks to elsewhere. And it turns to the US and the US. And so the US is supplying jet fuel into Europe, which is great, but the US refiners have tweaked their refining yields to be able to produce as much jet fuel as possible because, you know, a month and a half ago, they're all these concerns. You're getting flight cancellations, everyone's like, oh my gosh, we're going to have an apocalypse this summer because of the lack of jet fuel. What you have seen is them tweaked so they're producing as much jet fuel as possible. In the latest EIA report, we actually saw jet fuel in the US hit the highest level this year. And so great, jet problem is not as bad as we thought it was going to be. However, by tweaking those yields, you're then reducing the supply of products of gasoline and of distillates. And when you look at those in the trees, those in the trees are absolutely tanking. And so the reason for flagging this is that you've got the US that is having these barrels pulled out, we're okay on the jet side of things, but diesel has been pulled to Australia because Australia's gone to the Asian market so can you tell me some diesel gasoline and it's just like, no, we're good. So they come all the way to the US. Same for Africa as well. Africa is getting a lot of its diesel from the mid-east skull there. That stops, they need to get it from elsewhere. So this is great right now in that the US is putting all these barrels onto the market, but US inventories are getting depleted. And so we are approaching critical levels in terms of the inventories in the US. And so I go back to my point, look when you look at the US, it is 20% of the global market. It's a great proxy for what is going on elsewhere. And those inventories basically are being drawn down they're helping to supplement elsewhere, but when the US stops sending those barrels out, that's when the music stops and that's when the proverbial really hits the fan here. When do you think the music will stop? And I know it's different for a jet fuel, than it is for gasoline, then it is for diesel. You can get into the specifics, but how much time do we have before the oil market really is going to rupture as many people in the oil market? I would say most people in the oil market predicted it would in late February, really March. Yeah, so probably July sometime like that. So even if we look, the probably the best benchmark is to look at cushing. So you have cushing, which is where WTI, the US benchmark is priced. The crossroads, pipeline crossroads of the world, right? But all that, that's why it's basically used as that pricing point. Cushing inventories have just been dropping over the last eight, nine weeks, million barrels every week and they've gone down from being low 30s down close to 20 million. And we fly, we fly drones over there three times a week. We looked at, I looked at the drone number this morning that we saw and it's shown that they've drawn down another 1.4 million barrels. And so in next week's the IA report, that's going to be the prince. And that's going to show that cushing is getting extremely close to tank bottoms. Cushing has to get to tank bottoms. It's essentially the switch that causes WTI, that US benchmark to narrow versus Brent global benchmarks to essentially slow that pace of exports on the crude side. That has to happen. So we're going to be seeing US exports slowing. But the reason for flagging cushing is it's similar what we're seeing in the gasoline and the diesel side of things. you're going to need to see a price response to keep those barrels at home. Otherwise, the inventories are gonna run dry. - And so I just pulled up a chart of cushing, and yeah, we are approaching that 20 million barrel market. So it is low, I guess the last time it was approaching this low was 2014 when it actually went below 20 million barrels. What happens when it goes below 20 million barrels? - Well, back then there was less capacity as well. And so it's basically kind of 20% when it gets down to 20%. So if you look back in recent years there, every time it gets down kind of 2018, what we see about there, because the market forces take hold, right? And they essentially stop those barrels from leaving. And you can't sell any more from there, 'cause the last 20% is kind of like sludge, is operational low levels. And so you can't draw any more from it. - So you expect American oil prices WTI to go up relative to Brent oil prices, global oil prices. - Yeah. - Brent. And has that been happening? - Yeah, that has been happening. You've seen that narrowing, which has to happen. And so when we kind of look at our predictive numbers, we are see, last month we saw record exports out of the US like 5.6 million barrels a day before the conflict it was 4 million. And so that's the highest level that it's been. It was really high in April as well, not quite that high. But it's gonna drop below 5 million barrels a day in June here, just because the availability of barrels is drying up. And this is coming at a time. And this is why just broadly on a global basis, we haven't had such a big impact, or as big an impact as possible from this closing of the straight, 'cause it was a seasony week time of year. So now you've got even just in US, refinery runs away stronger than they were just a few weeks ago. So domestic demand is up. And it is again the same for Europe, like in terms of its jet fuel needs back a few months ago, it was like the shoulder seasons, right? It was kind of that lull during the spring. Now demand is ramping up, refinery runs are ramping up globally wherever they can to meet this higher seasonal demand. And yet the straight remains closed. So over a simple line, but broadly speaking, demand for energy and hydrocarbons is high in the summer, 'cause people use it to drive, and it's high in the winter, people use it to stay warm. The week period is going from the winter to the summer, the spring, and so we've actually been in a seasonly week period, and that may contribute to why, like it hasn't been this Armageddon scenario that many people predicted. Yeah, partially. And you can add in other things as well, like we talked about with China, that lack of Chinese buying demands has helped things as well. But ultimately you also have a president who has little gadget in his hand, which he can type 160 characters into a drop more prices, 10 to 15%, and we've seen it happen multiple times. And so that's why the market has essentially become, it's just the lack of the quiddity, because no one wants to be trading. Right, and a lot of oil people say, okay, powerful people, such as the president or the head of the Federal Reserve, they can control financial markets with their words, with their actions. However, those are financial markets. The oil market primarily is a physical market, and the president of the United States can tweet whatever he wants, the head of the Federal Reserve can talk whatever he wants, the EIA, they can give a speech, that's five hours long, the oil market doesn't care, and yet the oil market has cares. So why in the case? Because that price can move, right? You're seeing that physical, that impact, what they've done on those benchmarks there, and so they have had the ability to move it so much. But at some point, the actual structural shortages are going to kick in. And so while there's almost a sense of complacency on those headline benchmarks right now, as those extremities get reached, that's when you're going to see these vicious moves coming through here. But absolutely, you have had the ramifications too when you talk about like, like, with President Trump, he has been able to talk down the US oil price there. And what that has done, like, has incentivized higher US crude exports because US crude has just been talked down has become relatively more attractive. And so, yeah, it's a headscratcher, right? How we're in a situation here? Because you can ask any analyst and say, we're four months, you went to the fourth month of this, the straight-of-war move's being closed. And yet prices are below $100. How does that make any sense in the world? Matt, I imagine there are a lot of people in the market watching today as well, the RR interview, who are saying, OK, I listened to the oil people get so scared about what would have happened to oil market. And the price of oil is actually down from when I saw these dire alarms. And they actually, they may be thinking that the oil price can continue to go down, even if the straight-of-war moves gets closed. What do you say to those people? Stay out of the market, stay patient, and just keep watching the data. Because the data is going to show this, and it's going to be sooner rather than later, that we're actually seeing a breakdown in the global oil and products market here, just because those inventories are getting so low. And we've had SBR releases that have helped to cushion that. And as I mentioned, we have seen global crude inventories being drawn down. 84% of that move of that drop in those inventories has happened in two countries. One is the US, where we're seeing SBR draw downs. And the other one is Japan, same story. And so having this cushion basically being provided by the crude releases, but also by the product releases, they're happening like 30 OECD countries. So that's a gradual bleed essentially that's helping to debuff with the supply shock. But you can't go for so long, as I mentioned, is a billion barrels of supply that has been taken out of the market on the crude side of the picture. That was that 11 million barrels per day over the last three and a bit months. That natural offset there for the large part has been the drop in refinery runs. But then it's the lack of the products, which is going to come and bite us. And that bite is going to be back. Sorry if you already answered this, but just in what market of refined products has this shortage or the drawdown in supplies and inventories been the most acute in Jeff Yolk gasoline or other? We don't know in the Asian markets there. We can take a guess. But again, when you come back to this, the more high frequency data is coming out of the US. And you can see how those draws are happening here. And so they are helping to offset the losses in these other areas. But you can see in Europe, you're up in a similar situation where it's Jeff Yolk since the beginning of the year in ARA, which is Amsterdam, Amsterdam, and Bromadam, and so we're kind of like the storage hub there. That's drawn down 45%, 50% something like that. And so it's happening globally here. People are tapping those inventories. But the market is still like, it sounds like we're going to get a deal get done. Tomorrow the straight-of-hole moves is going to open up. Everything's going to be fine. And it just isn't. Hope you're enjoying today's interview. This episode of "Modulatory Matters" is brought to you by the Tuchrium Corn Fund Ticker-CORN. 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Thanks for listening. Let's get back to today's interview. It just isn't. So it sounds like you don't have all of the data to make a firm 100% call on where the shortage is most acute for refined products. But it sounds like you're saying it's jet fuel, or is it gasoline? Well, I think it's all of them. You can see that just in the US, they say, right? US distiller inventory is like at a 23-year load, basically. You can see that those jet fuel inventories are low in Europe there. And so it's-- well, the flows are kind of mitigating some of that impact. We can't see those stocks where it's drawing down on the product side of things, like non-OECD stocks. We can see the crude inventories. And those are looking fine in that we've seen a bit of a drawdown, but it's only two million barrels a day, something like that. It's happened in US. It's happened in Japan, not really elsewhere. But that crude is not being conceived because these refinery runs-- have dropped back so much. Everything comes back to low refinery runs, lower production of those products. And sorry, why hasn't there been a drawdown outside of the, in crude oil, outside of Japan and the US? Because of lower refinery runs? Yeah, because those low refinery runs, yeah, they're basically just been, and you have had some, some countries that have been able to import like a, like a great example of this, the whole crux of the situation. You look at India, India is about a week's journey away from the Middle East Gulf. It imports about 5 million barrels a day. It refines about 5 million barrels a day. It, it, it gets about half of its crude from the Middle East Gulf there. Those flows stop. So India goes out to the rest of the world, tries to get pulls in more Russian crude. It's pulling in those rerouted barrels from Saudi, from UAE, from wherever it can get them. So it's imports are holding up okay, not other 5 million it needs, but maybe 4 and a half something like that. So it's not in a bad situation, but two things. One is that they don't have inventories there in the first place. So they have like about 100 million barrels total inventories ahead of this conflict, which is 20 days of cover, which is a horrifically low number. But the, the point in this little anecdote is that when you look at the product side, they even know those imports are holding up this, their, their exports of refined products continue to drop. And so those countries that are reliant upon India are not getting those. And so they're holding them. They're being protectionist and keeping those barrels back. You know, China is done the same in terms of banning exports and keeping those exports back. And in terms of the products, it's just protectionist measures. And so again, even when we look at South Korea's in a similar story, they have rebounded in terms of their jet fuel exports. The US West Coast gets 85% of its jet fuel from South Korea there. South Korea, those flows are slowing down. So you mean the opposite, right? You mean, South Korea gets 85% of its jet fuel from US, right? No. The US West Coast gets. Because yeah, the US West Coast is like an island, basically. So the rest of the US kind of operates the same, but then the, the, the kind of the, the environmental kind of stipulations on gasoline, etc. I mean, it's kind of an island. So, so US West Coast, yeah, it gets, it imports about 100,000 barrels a day, something like that of jet fuel from South Korea. Very little from elsewhere. Now, as South Korea is being protectionist and exporting less and not getting as much crude to refine, does back its refining runs. What the US has been able to do is there's been the Jones Act waiver in the US. Jones Act, Jones Act has been in place for like a century or more. It basically says, you can move, you can only move between US ports on a US built vessel that has US citizens, US flagged, all that kind of stuff. So it's more expensive. You put the Jones Act waiver in place, that means that US crude and products can move around the US kind of freely. So you see more jet fuel going from the US to the US West Coast. So that's helping that problem a lot of all that is doing is drawing more barrels out of the US Gulf Coast. And so the US is just getting everything just pulled out of it here. And while we're still is still pricing to do so and still those barrels left in inventories, everything's fine. So what makes you say one month is what we have left. You said July, you know, we were here in June, so I'm just assuming it's one month, maybe it's one and a half month. Yeah, just when you're looking at these very trajectories of these various inventories. So just with the distillate side, maybe I'm being a little conservative on the number there. But even on the cushion side, we're playing we're seeing that play out and we're already seeing that those exports are slowing on the crude side of things because that US benchmark is tightening up versus global benchmarks. And so that has to be a natural evolution that you see happening with the products as well, because they cannot continue to be leaving the US at the pace that they are. And everything you say makes me think that over the past four months, the price of oil would be up, but it actually is down. What are the why is the price of oil down other than President Trump, you know, posting true socials, which we've already covered. But what are the other reasons? I think the China piece has really been surprising how China really dial back on the market. Market China is exceptionally good at managing its inventory levels, right? We've seen this over a good number of years here where when prices get high, they draw from there on to your inventories, when prices get low, they rebuild them. And they've also been building a stockpile over the last few years here. So we're so for China to hit the brakes by so much there, it wasn't like a selfless act or anything like providing these bounds to the market to keep prices down. It was just like we are not going to we've seen supply reduced by so much. We're not going into the market. And bidding against everybody else to get these barrels, we're just going to take a step back. And China may do that for another month or two more here, stay out of the market. They're going to have to come back in some point. They're going to be drawing down there on to your inventories. But such a huge chunk of crude being available in the market has helped to really keep prices in check here. But there's that piece. There's just the optimism piece. There's the almost that it's just a market that is somewhat broken in that you're just not having anybody that's wanting to go in there, even if you are bullish, you don't you don't know what's going to happen in in a minute's time. If like I said, President Trump gets on this phone. I understand why the traders at the hedge fund are reticent because every time they bought an option, a call option on oil, they tend to have lost money on it that year. But why are commercial players, refineries who, you know, around the world, why have they decided just to step back from the market? And rather than being, you know, being irrationally bullish on oil and proactively securing supply, which is what I would expect them to do during a huge supply crisis, such as the one that they're in. It almost seems as their combitose. Is it coming from the government? Has the government telling them, you know, basically we're instructing you to stop refinery runs or why are refinery runs so low in Asia? And if the answer is because there's not enough oil, how come they haven't even tried to bid it up? Yeah, sure. Coitose is great way to describe it was happening in terms of that price in across the various different products and crude. But like you've got a situation where and you were talking about hedge funds there, I think the macro guys have had an issue with this from the beginning, right? Because you look at this and say, okay, the straight-of-one moves just logically cannot be closed for two, three, four weeks here. That makes no sense because you cannot lose that much supply from the market here. But so that's just the one thing on the hedge fund side. And so there's like a lot of hedge funds have been burned by that, right? Just because this defies logic, what is happening right now. But from a refinery perspective, whether they are, they're just dialed back in the expectation that we're going to be seeing barrels coming back to the market at some point, they're not wanted to go out there. The thing is, like, if you are based in South Korea and you're going to go by a Brazilian barrel, US barrel, that is going to take you the best part of two months to get there. And we have seen South Korea do that. We have seen South Korea buying more US crude and that has been delivered. But that arrived like last month, they bought that, you know, two, two, three months ago. And so there is that lag. And so it's like, let's not, it seems as if the situation is going to get resolved sometime soon rather than later. Let's not go into the market and buy a barrel. There's two months away because we could see that everything's going to be fixed by that time. So there's that piece of it. There's the drawing down of the product inventories as well that they've been tapping into instead. And but simply, you feel like market forces have to take their toll here, right? Just as they have to in the US in terms of get those inventories down and to stop to stop that whole to hold that drop in the inventories prices have to rise. They're just sitting on their hands basically waiting for providing the domestic market and not worrying about their export market. How many barrels of oil per day has there been of demand destruction? Well, I think it's I think it's the nine, the nine million barrels per day. That night, that is oil that has been run through refineries that isn't being run. But of that nine million barrels per day, how many is due to people not consuming the end product or fine products versus drawdowns and refine products? Like how much is the is the not the on paper demand destruction of crude oil, which is nine million, but the actual demand destruction of people not consuming is very difficult to know that because we don't know how much is being drawn from the from the product inventories. So they have a hundred I guess. I don't think it's that much. And the reason that I say that is there's the concern there's the conservation. There's the rationing that is taking place, but there isn't demand destruction from a pricing perspective. So if there's not happening from a pricing perspective, then that that demands may only be down a few million barrels per day from the actual end user. Because again, you come back to the US side of things, right? US is a decent proxy for things were seeing the inventory is being drawn down here. We've actually seen gasoline prices on a retail basis pull back quite materially over the last couple of weeks simply because that price of oil has come down from 110 to 90. And so again, that that defies logic, but everything is being driven by that that oil piece and the the fact that oil is remaining suppressed there is meaning that the prices of the products are remaining in check too. So there isn't there's a demand destruction out there from an end user, but perspective, it's just the lack of refining. So in the US, gasoline has gone down because the price of oil has gone down. What has happened to the spread between gasoline and oil, the so-called crack spread, not just for gasoline, but also jet fuel and diesel. And obviously, when you have a high crack spread, that's very good for the refiners. It also can be quite bad for the consumer and end user. So crack spread has come off, but they are still profitable there. And so they're still encouraging the refiners to run. So like I say, US refining runs, they did back a little bit last week, but the week before, there were the highest that they've been since August there, which is what you would expect them to be doing because they're incentivized to be running there. So, and it's also the availability of the crude, right, in that the US imports so much from Canada, from on the Gulf Coast perspective, we're importing most of it from Latin America. So for all intents and purposes, the US is basically out of the supply shock. Yes, we've seen few of the barrels drop off from the Middle East, but Iraq, Saudi sending maybe half a million barrels a day, something like that, nothing too crazy. And so the US has been very much insulated from that issue, both from a maybe from a pricing perspective, but from a supply perspective too. Tell me how many barrels per day are going through the street of Hormuz. What was it before the war? What was it at the absolute bottom when basically zero barrels were getting it through? And what is it now? So, straight of Hormuz was prior was, there was about 15 million barrels a day of oil, about 5 million day of products. In terms of the, so the products have just totally stopped, you can't reroute those, you can reroute some of the crude that some of that's going from the, east west pipeline, it takes it from Saudi across to the Red Sea. Cross the land. Yeah, across the yeah, and you've got yeah, exactly, and then you've got pipeline, ad cop pipeline, which helps circumvent the straight of Hormuz. But basically the flows through the straight of Hormuz now, it was like 120 vessels any given day, vast majority of those with tankers. Now it is just like a handful or so. And all those, most of them are Iranian tankers. They are some, you've basically got these, these two lanes that go through the straight of Hormuz, and they're two miles wide each one. It's basically like a highway, right? One goes in, one goes out. Those lanes that were stipulated by the, like the, the, the IMO, which basically governs the sea. You've got, those are not being used because their, their mind, or we don't know whether their mind or not, and no one's willing to, to, to, to go, to take that risk. So now you have tankers that are going up into Iranian waters and passing through that way. And so whether they are paying a toll or not, who knows, seems like some of them may be. But the, the point being is of those handful or so of tankers that are moving through, they're, they're mostly Iranian, they're mostly, they're other friendlies, they're paying a toll, they're smaller tankers as well, or they're taking, they're taking like LPG to Pakistan or something like that. So it's humanitarian flows. But point being is, yeah, the flows have essentially stopped, and you can see that even with, with what crude we see still stuck in the middie sculptor, it was maybe 140 million barrels back in early March, it's down to about 120 now. So we may have seen 10, 10 tankers, you know, get through over the last three months. But when you break that down across that 12 weeks, there's not very many. So it's, it's world. Yeah. So the, at various points over the past three months, there's been hope that traffic would pick up most notably like, you know, my, my friend's trainee put out a piece when he's, they went to the straight of hormones and they said, okay, we're seeing traffic there. I think that was just on a week when it was, it was going up from literally zero to like five. And they, they saw some very, you know, bold and, and brazen ship owners of a Greek heritage, take, take their ships through. Yeah. But like you're saying that in terms of actually looking at the data on a grand scheme, it really is, is not going up that much. No, no, no, no, it's not like, oh, we've returned to 25% of traffic or anything like that. And even, and that's when the, the waters get muddy like you say with Chitri, which is an awesome piece in itself, right? But when, when you look at say the, the US government, they say they come out and say, oh, we've had 30 vessels that have passed through. That's over a number of weeks, right? And it's the same with, with Iran. Iran says, oh, we had 30 vessels passed in the last day. That may be speedboats, right? It's, yeah, you know, news don't count. Hi, X don't count. Thank you, Zonlin. If someone says 40 boats have passed today, they likely include like fishing boats and container ships and there's, does not count. Yeah. And one other thing as well is like even when you, you, you have the, the straight of Hormuz, and then you have the US blockade as well. And the US blockade is hundreds of miles further beyond the straight of Hormuz there. So even if you're seeing an Iranian tanker going through, it doesn't mean it's going to be passing the blockade. And so the blockade is actually worked extremely well and stop in those tankers. So there's a, there's a lot of like, so the buildup that you can see visually like just out the side, the, the straight of Hormuz, but still inside the straight is, is wild. It's just log jammed basically. So it seems to you and it seems to me and perhaps it seems to our audience based on what you've been talking about that the global oil market is kind of sleepwalking into a crisis. If we're in the summer or we're talking in the fall or even we're talking in November of 2026 and having for bed, the straight of Hormuz is still closed and the price of oil isn't $200 or $300. Is that possible and what explanation might that be for why you and the oil experts were wrong? There is a decent likelihood that the straight of Hormuz remains closed in November. I remember when all of this started right because we have a team that's maybe like 50 of us doing research at Kaplow that are writing about it now and we have a dry bulk, the guy that leaves the dry bulk team. And as soon as this happened, we were all like estimating when we thought the streets could be opened up and it was like next year and we were just like, oh good one. And he's like, no, I think it's true. And then every month goes along and it's like, wow, Alexis maybe right here. And so that's to say that we have to accept that as a real possibility because the thing you hear Jack, you have the US that has got the US blockade in place is stopping the running tankers leaving. Iran is blocking everything leaving right. They have all the power here. And the two sides are so far apart in terms of meeting that it seems highly unlikely that we're going to get some type of resolution. There's not going to be one day where Iran just says, well, open up the straight. They hold the power there. And the US seemingly isn't willing to, it wants the straight open back up. That's the problem. They're not going to make concessions perhaps on the nuclear side of things. The reparations releasing money in that. So it seems that there's two paths that we can take here. Well, there's three actually what one is the stalemate and the straight remains closed here for months and months and months ahead here going forward. The second is that the US agrees to some type of nuclear situation, given the max ester money and then walks away and says, oh, we won when really the US has lost. The third one is that you escalate against Iran and basically have realized that they're not going to budge here. They're just doing delaying tactics and then you have to essentially ramp up on the military side of things, which is not a great option in itself, right? Just from a people perspective and monetary perspective resource perspective. All that stuff was not good. I agree. War is not good. No, but that's a possibility. And if that happens, the longer the Iran goes on and the weaker the get, the less they have to lose here. And so I think that's when you bring Babel Mendevin to play here too. You have the other choke point basically as to the Red Sea. And that's where Saudi's been able to reroute its crew to it sends three and a half million barrels a day of it. It's been able to reroute about half of its crew. So be going into Asia, you stop that choke point and then you have to send those tankers all the way around. And so that's a real possibility if we get that Iran closed that the waterway through which oil gets to Asia the other way. Yeah, exactly. How would you do that through the via the Houthis or via the Houthis? Yeah. Okay. So we saw this kind of happening in 2023, right? And we've never seen the volumes actually recover to the levels they were. I actually got on the screen. But yeah, so it's that's a distinct possibility. And so they have to do is take four weeks to take that tanker all the way through the Mediterranean around West Coast of Africa and in Cape good hope. But but kind of back to your question. So, you know, if it's still closed at that point, you know, we're going to be in real problem. And I know that we said they would be $150 a barrel now. But like, we're at 90, but like, this going on for months, it just cannot persist from a supply perspective on the product side. Yeah. And Matt, I think that, you know, I don't know about you, but I think so many oil analysts in the energy space who are, you know, many of whom are really, really smart and do so much work. And many of the times their calls are so accurate. Like, they made a very bullish call on oil that over the past three months has been wrong. Like, the price of oil was 110. They said it would go a lot higher. And it's now below below 100 on WTI. I think because of that, someone oily analyst again who are great are a little bit sheepish and they don't want to make the call again and continue to be wrong. Like you don't want to be the guy who's constantly calling for a recession and the economy doesn't go into a recession, you know, it's bad for your reputation. But like I think now is it's even more strong case than ever. So like I don't know who needs to take up this mantle of calling for $200 oil. Like I'll take it up, you know, I'll take your national hit of being wrong. Like give me the ball guys, you know. It's all yours, but that's it. But it is that way though. It feels, it feels that way right now when you just look at how things are here. It's like this something is going to break here and you can see it on the inventory side of the picture and it may be on the product side where this happens. And so we see because you could you have to get to the point where if it is the products of the issue, you have to take them to the price where it kills enough demand destruction. And that price is way higher than where it is now. And so that's the possibility. What's that that's that film called everything everywhere all at once. I think it's cool. But like that's kind of feels like where what's going to happen. There's going to be this moment where it's like, oh, that incremental barrel, the price of it is going to start to rise because that's the last one that's available. And so whether it seems that we should see that in the US because the US has the supply and that. But yeah, they need to rise to not leave the country. And we'll see and we'll see and we're seeing that play out on the crude side. That's already starting to play out and that we can see that with cushing. And so just taking that blueprint and looking at the distillates and the gasoline side of the picture. So without knowing how much we've lost in terms of refinery runs elsewhere in the world, just that pace of us tells us that this this surely has to happen. And even though the price hasn't reacted yet, doesn't mean it's not going to in two four weeks. And so yeah, it's something's got to give Matt. What about I so I know it's very hard to see what the level of demand destruction is in terms of consumption of end products. We know it's a $9 million dollar, $9 million barrel per day, demand destruction on crude. But how much of that is actually refined products, demand destruction or how much is just refined products being drawn down, you know, eventually to zero. I know it's very you're saying it's hard to have the data on that. You know, if you and Kepler are saying it's hard to have the data. Basically, I think no one knows other than the people literally running the refineries. But I know this is one to two months ago, the IEA International Energy Agency started having a tracker of countries that started enacting policies, the governments to dissuade the the the consumption of petroleum. So, okay, you know, start to ride your bike. Okay, electric, electricity consumption is going to go down after 8 p.m. and very serious because you know, there's two ways to do demand destruction. One, the price goes up and people can't afford it. The second way is the government says just, okay, folks, let's kind of try and cut our consumption here. And perhaps the second one is a little less dramatic. Just how, you know, I know that we only have kind of qualitative data on this, but just can you speak to the level, if at all, you think that has curbed consumption in Asian countries that like let's be honest, probably have an attitude that is different than an American attitude. Like I think in America, our attitude is if the price of oil is at $150 and it's 2008 and you have a Hummer and you have enough money to drive across the country and you know, spend $10,000 on oil and gas, that's your right. Like I think other non-American countries have a slightly different view on that and maybe we should take down the account. I don't know. Yeah. And so, yeah, I think it is having an impact. I think the behavioral response is a very different from a developer to a developing nation or a developing world there. And so that is having some impact. But again, I think it's still very incremental on that side of things. It's probably not moving the needle too much. But even when you talk about the IA, the IA was one of the biggest kind of scares to the market, right? Fadi Burrow came out a couple of months ago, said about what the jet fuel side of things were going to be running out. But what, but we have seen a response there, right? As I mentioned in terms of the refineries tweaking to address that issue. And so the jet fuel side of things doesn't look anywhere near as bad as it did even just six, eight weeks ago. But it's just transferred that to other parts of the barrel. And so now the issue and the downward pressure on inventories is on the distillate side of things. So there's this moving around, there's drawing down of different inventories and there's kind of shuffling. And it's just obscuring the picture here that there is this just general absence of barrels from the market. Tell us about shipping. What's been going on with the availability of shipping, the shipping rates. And I'm here I'm purely referring to tankers. And what if anything does that indicate about the overall oil market? Like I know India had been getting a lot of Russian barrels from the straight up from moves. Sorry, a lot of oil barrels from the straight up from moves. Because of the closure of the straight up from this, they've been getting it from Russia. And you know, there's nothing more inefficient than India importing oil from Russia. Because it has to go all the way around Europe and all the way around Africa. So it takes a long time. And therefore that causes demand for shipping to go up. Because days at sea are so high. That's just one example. What else are you seeing in the shipping market that is of note? Because I talked with shipping analysts, you know, maybe two months ago actually, and things were getting very spicy. And they did. They got they got really spicy. And then those levels came back down again, right? And so there was that immediate kind of knee-jerk reaction. But I think what you've got is the availability of the tanker. Simply if we just considered the VLCC market, right? We'll see those retainer. Yep. Yep. Exactly. And so there was such a number of those that were moving Middle East in crude and they weren't able to load and move that anymore. You've seen those kind of been dispersed elsewhere or deployed elsewhere. And that has as you contributed to record exports out of the US because there was back a point two months ago, six weeks ago, where like traditionally you see about 25 VLCCs heading to the US on any given day. That number got close to 70. It's just started to drop down again in recent weeks here. But basically, yeah, they're like, we don't have anywhere to go. Do we sit? Do we idle? Do we wait for it to open up? Or do we go and collect crude from somewhere else? And so all that to say is that we've seen those freight rates pop and then they've come back down again as the issue of supply concerns have eased. But the same thing again, Jack and again, is that conundrum is on the prices. You've seen the same thing on physical barrels, where you have that Brent marker and then you have like a guy in East barrel or a North Sea barrel. And those are the differential to that Brent basis. And the premiums popped like crazy. And so the physical market was showing the strain. But now you've seen that come back down again as well. And so even like that West African barrel, just because you haven't got China in the market that's buying it, then you've just seen those differentials kind of drop off. And I know in April, there's a huge squeeze in to export refined products from America to Asia. What has happened there? And how is it that the Southeast Asia and a lot of Asia was just desperate for refined product imports from America two months ago. But two months later, the pressure seems to have eased. Like where is this magical, you know, mana from heaven refined products that has made everything seemingly okay, at least for a while. What's going on? Yeah. The refined product preces that was very incremental the stuff that goes to Asia. So what we were seeing is perhaps like Natha. So that's being taken for the like bending opponent or for petrochemical consumption. So again, coming back to the Middle East there where you've had those LPG flows that have been cut off leaving the Middle East. Also the Natha they were exporting 1.2 million barrels a day. That was going into Asia. That stops. So what you've had is LPG's Natha being pulled from the US into Asia. The LPG was being pulled there anyway. But in terms of the product side, you traditionally traditionally typically see a lot of gasoline diesel heading into it stays within the Atlantic basin. You see a lot of the heads into Latin America. On the diesel side, you see some of it heading to Europe. There's been that pull to Europe as Europe has structurally short of diesel. It needs to import it and it is long gasoline. And so it gets to export some of that stuff. The point being is that there is still that demand. We are seeing record export of clean products. So about 3.2 million barrels a day of this stuff. And majority is going into Latin America. You weren't seeing those incremental barrels, but again, I think it has just been when again going back to that point of India and when you look at South Korean crude imports, they really pulled back big time in April because there was just this massive hole left by the flows from the Middle East. And then what they'd done is in their interim from the straight closing, they'd gone into the market and bought barrels from elsewhere. So we saw Indian imports rebounding in in May. We saw South Korean imports rebounding in May as well. So they then had more products for themselves. So they were basically more well supplied from a protectionist perspective. Tell us about the storage of oil as well as refined products that we had going into the war, what has happened to that on water storage and what's the significance of that? Yeah, sure. So floating storage was about the same as it was, about 140 million barrels, something like that. What has happened though is you've kind of seen the makeup of it. [BLANK_AUDIO] So even on the Saturday, right, when it ran, started to get bombed, there was floating storage of Russian crew south of India. They were basically like, come on, sure. Right. And so you've seen like a Russian floating storage drop, but you've seen an increase basically because there's a lot still sat in the mid-east Gulf there. What is it a bit of conundrum is that a lot of the makeup of that floating storage still remains being Iranian crew. So it's 50 million barrels. So what we've had is is a drop in the exports and don't get me wrong, like exports out of Iran have really dried up big time. So they were like maybe, you know, 1.8 million barrels a day, something like that prior to this. And then they're basically slowed down slightly. I think we've only had one loading this week. And so, so there's let and then they're not getting out of the blockade, but that crew that had left before the blockade is now a lot of that still set off China there. So it's the sanctioned barrel side of things. But in the grand scheme of things, the floating storage side of the picture is is only a small piece of the pie here. So if we talk about oil on the water, it's about 1.1.2 billion barrels. And yeah, 15% of that is the floating storage. Wait, wait, oil on water is 1.2 billion and 15% of that 1.2 billion is floating storage. Yes, exactly. So it's been sat somewhere predetermined for seven days or longer. Okay. So the rest of the oil on water is in transport is moving. Yeah, exactly. Yeah, you got it. Okay. I thought it was bigger. And sorry, maybe I'm just looking at other data that's out of date. But I thought that oil and water did go way down. Are you saying that it went back up again? Yeah, exactly. Yeah. So did it. It absolutely tanks because, you know, those barrels got delivered from the Middle East. And then there weren't new barrels being loaded on the front end. And so the so that oil and water really drops. And then you saw the response. And so rebounded by about half. So when from 1.3 billion down to 1.1, they're back to 1.2. Because you had more US crude exports and you were getting say more Brazilian crude that has been loaded. And it is on the water for longer as well because it's Asia where the increases come through from say from the US crude export perspective. So it's gone longer time on the water. What's happening with the ships that are still stuck that are stuff full of oil in within the straight of where moves. I mean, I know it's physically happened to them. They haven't moved. But is that being counted in the oil on on water? That's in the floating storage number. Yeah. Yeah. Yeah. So got it. Sorry. I'm still I'm still confused why it went this. The floating storage went back up. Can you explain that again? Yeah. Sure. So the flooding storage increased because non-Middly barrels got drawn down but Middle East barrels increased. And so so they were sat there. Whereas crude. It's new barrels within the straight of her moves. Yeah. Yeah. Yeah. Yeah. Okay. Yeah. How much storage capacity is left. So the rate could honestly had kind of assumed even two months ago that they had very rapidly ran out of storage with behind behind enemy line. So to speak like that. Behind the blockade. Yeah. But what you said just just now made it made it made it indicate. And then also what is the consequences of that on production? Have there been additional shut into production. Yeah. Production is probably we believe is over 13 million barrels a day being shut in there right now. So it was maybe 11 was seen that increase inventories there on sure are basically full right. They just filled those up. And that that's a huge part of the problem because logistically if as and when knock on wood the straight finally opens back up. You've got to first of all get the full tankers out they need to go to age at this charge come back again. You need to draw down those on your inventories because you can't increase production. If you've got full inventories you need to draw that down. And then you've got to get your refineries back up and running as well. And you've got to get it. And then you can ramp up your production. So it's like a whole series of ducks that you've got to get in a line here to really start ramping up production and getting everything back to normal. Which is going to take which is going to take months right so production in the Middle East behind the street from who's is down by 13 million barrels a day. Yeah. Yeah. So that's that that's that when we're talking about that the loss of that the supply from the market when I was saying that 11 million barrels a day since the beginning of March. Yeah, that's that number. Yeah. So the exports went down by that much or even more, but there was some filling of the ships going in. So once the straight of her news gets opened, they can be they can come back in but now an actual production. Wow. Yeah, just to give it perspective perspective for our audience. The fear of what Russian production would go down by because of the you know Russia's invasion of Ukraine in 2022 was 3 million barrels a day. And so what we have now in the Middle East is four times bigger than the fear. Then the thing that didn't even happen. It happened in 2022. It's happened now times four and people are way less freaked out now than they were in 2022. So this just seems like one of those things I know the oil bulls have been run wrong for three months. But it's just people should be aware that this is an anonymous anomaly. But Matt I kind of ask you this question already. But what is it that you need to oil bulls are kind of missing like like again if we speak in in December in the price of oil isn't $200. Why like you know is there some hidden hidden hidden stockpile that you know beneath beneath the earth that the oil analyst had been counted you know. Yeah, they may it may be the hidden barrels. But I mean for us to avoid this situation in like you're talking for five months time here. And demand is going to have to have been really tapered back and that demand would have been because and they even that still doesn't make sense right because demand has to be tapered down but you do that via lack of supply. So lack of running through the refineries but you can still go into the market and buy barrels. So there is the availability there because if there wasn't you know. The prices will be much higher and so it's it's it's that's why it just seems logically that the inventories are just going to be drawn down they're drawing down in the place where you know we cannot see on the product side. The next few months here is seasony demand increases they're going to draw down of crude more and invisible places. We can track all of the crude inventories and so we will see it happening there it will start to happen as seasony demand is ramping up we're seeing it drawing down in the visible product inventory places so it's going to be the combination of those two things which is finally going to kick start the market here. When you encounter someone in the oil industry who's not freaked out of their mind who is not bullish on oil what is their argument you know. Thank you if I know anybody that yes next to a Kepler or you go to an industry conference and oil conference and someone says you know I actually think I've got a little bit of a contrarian view here but you know the people who have an $80 forecast on oil which is still higher than the forward price of oil like any year. Or or their forecast is where the curve is which is like $70 in December or in a year from now yeah what's their basis what's the argument that they give do they have anything other than the street of room is going to reopen or what's the argument. The argument is actually when you look at global inventories like a body like IEA who tracks all of this stuff albeit on a lagged basis that number is huge right that number is like $8 billion yeah exactly and so they're like don't don't don't talk to me about hitting tank bottoms here because we've got 8 billion in in inventories you're just making a mountain out of a mole hill. And that's the only one the and I'm honestly not speaking to anybody that's really bearish I'm speaking to people that are in a similar elke that are scratching their heads and saying okay so how much is the market in deficit where could we be missing that if the market is this much in deficit why are we not higher and what point should this really cause. The tank bottoms that you're so called talking about here and again I just come back everything everything is back to the US everything comes back there because that's where we can see all of these inventories we can see this playing out there and so I know we haven't talked about an export ban there has been like murmurs and rumors more in the last couple of weeks about that. And my concern is that you the US like I say such a microcosm for what is happening here right now maybe the thing that ignites this the rally that we need or the you know supply shortage concerns but my worry is that before we get the market forces kick in to slow these inventory changes you have the US administration come out and put a ban or restrictions in place and that only just like models the picture further and is a very bad idea. So Matt the yeah the oil bears or the neutral people and oil say we have a stock pile of eight billion barrels. Why is that not a convincing argument to you for to be bearish on oil like we have enough Matt what's wrong and 1970s when the price of oil basically 10x there were no strategic stockpiles now we have them. Yeah sure so we will a you have the mean countries that you're not going to go to China say hey please can you release stock on the market so I was going to be like we're good but thank you and they like they've got 1.2 billion kind of just just sat there right just on the crew side of the picture so that that accounts for part of it but I think when you look at these various areas when we're talking about cushion you know cushing it there's still 20%. percent left in cushing, why are you going to not be taken down to zero? There are operation low levels here, and that's happening around the globe across these various different tanks and storage cabins. And so that's why that 8 billion level is very misleading because that's not really what we have available. And what you're meaning, I believe, is that a lot of the oil in the tank needs to remain in the tank to literally be able to flow it in and out. So it's, yeah, it can't go to zero. Yeah, exactly, exactly. And that's not just like one thing that's happening at cushing, that's a good example was happening elsewhere. Like for USM trees commercial, again, you can look back at historically low levels there and say, okay, we cannot take US commercial limitaries to perhaps 300 million on a national basis there, perhaps the limit is 350, 380. And if that's the case, then we've got like 60 million barrels left. And then you're like, okay, well, we've got 60 million barrels left, but we drew down 8 million barrels last week. When the SPR releases slow down, then you're going to be needing to draw more from commercial limitaries. And then you can start to outlay the timeframe for when these things could hit tank bottoms. And then again, it's even more apparent in the products in the trees. Yes, one thing I had failed to understand, I'm certain you knew it, but when I first started doing oil interviews in late February or early March, was just how well supplied the oil market was heading into this? That is such a great point. And you asked me a question, I kind of went off on a tangent. And that's so true because I came in January, February, we were expecting, we were seeing such a surplus in the market here, so much supply up, hasting demand. And so that has also actually does a buffer as well, because if we were oversupplied by two and a half, three million barrels a day, three March to May there, that's kind of the buffer that we were working with. And so that that was actually does a big cushion. But the death, those surpluses have flipped to deficits. So June took August, we've got really large deficits coming through as well as all of the production losses. And so you're adding it on top of that rather than taking out the surplus from it. So Matt, we're recording on a Friday, we'll hopefully try and get this out on a Sunday. We know how President Trump likes to make or announce the amount of Ron on Sunday night, before the market opens, the future is open in America. If hopefully I love this to happen, if there is an Iran, US ceasefire a deal with Israel as well. And the straight reopens tomorrow, or let's say on Monday, so in a few days, is the oil market going to be okay? I presume you'll have a speculative decline in the price of oil, but like long term, what's your oil analysis? Assuming the straight reopens Monday. What does that world look like? Yeah, so we do see a drop in oil prices, whether it's ten bucks or something like that. But then it's then going to be a gradual return. It's going to take months and months right in terms of getting everything back to normal. So even if it opened on Monday, we'd still be looking at June July, August, kind of getting into September and things just kind of still returning to normal on that side. But you would be able to get those barrels to these Asian countries. They would be then able to increase those exports and so those dominoes that have fallen will be able to get picked back up. And so the situation can get resolved in terms of all these concerns that I've been talking about in terms of tank bottoms. Yeah, that situation would get fixed because barrels won't be being pulled out of the US at such a pace, et cetera. And it would take time to fix that. But yeah, it would be a similar price environment for the products, but a drop in oil. Matt, what is something that a lot of oil people believe or even, you know, generalist macro investors believe that oil that you think is wrong, that maybe with your Kepler data you say, actually, no, this is wrong. I don't know about Rome, but again, I'm just going to go back to Harp on the, the product side of the picture. So we talk about all the crude losses there. And I'm saying, oh, well, refinery runs have been dialed back so much. But what you can do just with our data is look at clean product exports. And they were just trucking along around 20 million barrels a day, something like that head of the conflict here. They've dropped down to 16 now. So we've lost 20% of those flows. And so even if you think it's poppycock, what I'm talking about here in terms of the refinery runs dropping by so much, we can see that being reflected through in millions of barrels a day, fewer hitting the water day after day after day after day on the product side of things. And so that's going to come home to roost at some point. So yeah, for those skeptics there, just take a look at the lower exports. Okay. I'm trying to think of something that is, well, I mean, there are people who are very successful in industries that are not energy who are posting online. And they're just like pretending that the straights reopen, which is funny to me. That's like literally like a fantasy novel. They're like pretending like there's a hundred sixty tankers going through. And they're citing like CIA relationships that I'm sure they talk to people to CIA, but I don't. I'm going with you and the oil people, not them. You know what? The one way that I've looked at this, because that's obviously my biggest concern here. The last thing we want to do is be reporting something and then it being wrong, right? So when you look at the the Middice Gulf there and this talk about these apparent cargo is leaving, of course, they're going to be switching off their AIS. They're not wanting to be seen. They're trying to avoid us seeing them, right? Whether it's on satellite imagery with their transponder switched on, whatever that may be. The thing that kind of gives me confidence is that when I look at how much oil we still see sat in the Middice Gulf there, you can see, yes, it's dropped, but nothing too crazy. So there isn't this whole kind of exodus that is happening. And even with the Iranian stuff, that just tells us all we need to know, right? The Iranian stuff isn't getting through. It's not passing the block AID, and so everything is just kind of being still held within this region. And obviously there's the few tankers that are getting out, but again, it's just a few and is not enough to move the needle. And so until what it's going to take is first move, as that's what we're calling them, is because even if the straight is declared open, you're going to have a certain amount of hesitancy and wanting to pass through there, it's going to take certain companies or shippers that are going to be like, okay, we're going to do it. And once you start to see that number get up to maybe 20%, that's when we really start to see the traffic ramp up. But we're not anywhere near that yet. And even when we get to the point that we can do that, it's going to take some brave souls to go for it. And indeed, Matt, can you summarize your outlook on the oil market as we sit here today? Yeah, sure. From a pricing perspective, it feels like not just on the crude side, but on the products too. We're very much in a comatose situation here in terms of the volatility. And what's going to take us to get out of that is the shock of those inventories getting through a low level here. And the place to be watching that is in the US because it's so transparent and so timing we'll see that playing out. And the thing is the US is in the best situation out of out of everybody. So when it starts to turn really bad in the US, you know, it's getting really, really bad for everybody else. Matt, people we find you on at x@matvsmith01. Of course, your website, capulair.com. Thank you, Matt. Thanks, everyone, for watching. Please leave a rating and review for monetary matters on Apple podcasts. Spotify, subscribe to the monetary matters YouTube channel and also check out monitoring the situation or MTS live where max, this is partner and I, we are hosting and live streaming every day of the week from 4 p.m. to 5 p.m. Eastern or as the folks in Silicon Valley say 1 p.m. Pacific to 2 p.m. Pacific as well. Thanks again, Matt. Thank you. Hope you enjoyed today's episode. Those interested in learning more about the 2.0 Korn fund ticker C O R N can find more information in the link in the description until next time. [BLANK_AUDIO]