Energy Transition | AI | Shifting World Order, Mint Finance

Suhas Reddy

Energy Transition | AI | Shifting World Order

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

Macroeconomics

<ul>
<li>Chair Powell decided to maintain Fed fund rates at 5.25%-5.5% sticking to the much expected higher for longer strategy given the reverse direction of travel on rates.</li>
<li>Forget rate cuts. Those hopes are diminishing. US prediction markets are pricing a 40% chance of zero rate cuts this year.</li>
<li>Nonfarm Payroll numbers tomorrow will hint at the path of interest rate travel for the rest of the year. Continued strength will melt hopes of rate cuts further.</li>
</ul>


Chair Powell decided to maintain Fed fund rates at 5.25%-5.5% sticking to the much expected higher for longer strategy given the reverse direction of travel on rates.
Forget rate cuts. Those hopes are diminishing. US prediction markets are pricing a 40% chance of zero rate cuts this year.
Nonfarm Payroll numbers tomorrow will hint at the path of interest rate travel for the rest of the year. Continued strength will melt hopes of rate cuts further.


Strong US Payroll Will Completely Crush Rate Cut Hopes

Thematic (Sector/Industry)

<ul>
<li>This paper contrasts performance of integrated oil exploration and refining firms ("Explorers") with oil refineries ("Refiners").</li>
<li>Hypothesis is that Refiners outperform Explorers when the crack spread widens. Back testing based on select firms proves the hypothesis.</li>
<li>This paper posits that Refiners will outdo Explorers when crack spreads tear based on historical performance.</li>
</ul>


This paper contrasts performance of integrated oil exploration and refining firms ("Explorers") with oil refineries ("Refiners").
Hypothesis is that Refiners outperform Explorers when the crack spread widens. Back testing based on select firms proves the hypothesis.
This paper posits that Refiners will outdo Explorers when crack spreads tear based on historical performance.


Widening Crack Spreads Enable Oil Refiners to Outdo Oil Explorers

Commodities

Gold is a chemical element with the symbol Au (from Latin: aurum) and the atomic number 79. In its purest form, it is a bright, slightly reddish yellow, dense, soft, malleable and ductile metal. Chemically, gold is a transition metal and a group 11 element. It is one of the least reactive chemical elements, and is solid under standard conditions. The metal therefore occurs often in free elemental (native) form, as nuggets or grains, in rocks, in veins and in alluvial deposits. It occurs in a solid solution series with the native element silver (as electrum) and also naturally alloyed with copper and palladium. Less commonly, it occurs in minerals as gold compounds, often with tellurium (gold tellurides).

<ul>
<li>Gold prices touched a record high in April despite headwinds due to robust demand from Chinese speculators.</li>
<li>Asian Gold ETFs saw a net inflow of funds in April, while American and European Gold ETFs witnessed net outflows.</li>
<li>Demand for gold continues to be driven by central banks of emerging markets like China, India, and Türkiye.</li>
</ul>


Gold prices touched a record high in April despite headwinds due to robust demand from Chinese speculators.
Asian Gold ETFs saw a net inflow of funds in April, while American and European Gold ETFs witnessed net outflows.
Demand for gold continues to be driven by central banks of emerging markets like China, India, and Türkiye.


Chinese Speculative Activity Driving Gold to Record Highs

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, also known as a fossil fuel, which means that it can't be replaced naturally at the rate we consume it and is therefore a limited resource.

<ul>
<li>EIA raised its crude oil price forecast for 2024 and 2025, cites higher global oil consumption outlook and concerns over geopolitical tensions.</li>
<li>The agency also increased global liquid fuels production outlook for 2024 compared to the previous month.</li>
<li>Increased forecast on US retail gasoline prices relative to March STEO, expects lower gasoline inventories and higher net exports drive price rise.</li>
</ul>


EIA raised its crude oil price forecast for 2024 and 2025, cites higher global oil consumption outlook and concerns over geopolitical tensions.
The agency also increased global liquid fuels production outlook for 2024 compared to the previous month.
Increased forecast on US retail gasoline prices relative to March STEO, expects lower gasoline inventories and higher net exports drive price rise.


EIA Lifts Price Forecast on Higher Oil Consumption Plus Tighter Supply

<ul>
<li>OPEC+ decides to keep output targets intact till June. Iraq and Kazakhstan vow to compensate for overproduction.</li>
<li>OPEC+ pressed its members to improve compliance with production quotas in Q22024.</li>
<li>Expansion in US crude stockpiles slightly dampens the bull run of oil prices. While gasoline and distillate drawdowns come in better-than-expectations.</li>
</ul>


OPEC+ decides to keep output targets intact till June. Iraq and Kazakhstan vow to compensate for overproduction.
OPEC+ pressed its members to improve compliance with production quotas in Q22024.
Expansion in US crude stockpiles slightly dampens the bull run of oil prices. While gasoline and distillate drawdowns come in better-than-expectations.


Oil Prices Surge on OPEC+ Decision, US Inventory Buildup Slows Momentum

Suhas Reddy
Energy Transition | AI | Shifting World Order
• Mint Finance

Strong US Payroll Will Completely Crush Rate Cut Hopes

Fed maintains fund rates at 5.25%-5.5%, Despite high inflation Chair Powell stated that rate hikes are unlikely, Continued strength in the labour...

Mint Finance

Widening Crack Spreads Enable Oil Refiners to Outdo Oil Explorers

Pure play crude oil refining and marketing firms outperformed integrated oil E&P companies during times of widening crack oil spreads.

Mint Finance

Chinese Speculative Activity Driving Gold to Record Highs

Despite fading hopes of rate cuts, elevated treasury yields, strikes in India, easing geopolitical tensions, Gold prices continue to set new highs.

Mint Finance

EIA Lifts Price Forecast on Higher Oil Consumption Plus Tighter Supply

EIA's April STEO reveals upward revisions in global oil consumption, production, and price forecasts. It also raises forecast on gasoline prices...

Mint Finance

Oil Prices Surge on OPEC+ Decision, US Inventory Buildup Slows Momentum

OPEC+ holds firm on output targets, propelling oil prices higher amid supply fears and geopolitical tensions. US inventory buildup tempers gains.

Mint Finance