jay powell crushed the market recession fears are back the feds going to go to 6 percent etc what does that do to oil demand when are you hearing the oil demand and the expectations for demand just bounce around between what the fed is going to do and what chinas doing and so there have been periods when in the last couple of months when it was chinese recovery was going to drive up the price of oil because demand would go up but now with the latest news from the fed that again makes it seem to people that enter the market that that will end up slowing the economy and repressing demand so its a market that goes back and forth on the news so i love that description because on the one hand a week ago it was like oh were seeing a synchronized global growth we didnt think that was going to happen and then now it feels like well maybe we will see a decoupling of growth china versus the west well even on chinese growth i mean it goes it goes up and down to chinas coming back strong its a v recovery and then looks more spotty its taking longer to come back so all of these and the oil price and the oil markets really a derivative of what happens to gdp so you just sit in for more volatility versus asset level we go to 70 we go to 100 well i think it is going to be it is going to be volatile responding to what happens and whether weve finally seen that there is some kind of recession what the nature of the slowdown is or if it turned around that we really saw china coming back you know hot and heavy then at that point wed see wed see a stronger market the general expectation has been in the second half of the year is when the market is going to tighten again because at some point they will stop raising rates and at the same time itll become clearer chinas recovery and at that point well see if the market is more tightly balanced i almost wonder if the biggest risk for the market is that china demand is much stronger considering that spare capacity many say is really tight absolutely that is that is the question because then you would get a very tight market and if you had the kind of growth that even before the latest fed thing that people were projecting that was going to get you into a tight market and that was going to pull up prices and then that would also have an impact on the global economy that was the demand question for sure the supply question for this year is what happens to russia it feels like russian oil supply and its products are getting on the market whether or not creating inefficiencies is one thing but its getting on the market and its an apt yes and absolutely by the way that was the intention of the price cap from the treasury less to ensure that there was not a shortage of oil because russian oil did not get into the market then you would have had prices spiking again so it was to reduce russian revenues but helped keep russian production up so it actually really works yeah yeah the price cap is work i think its i mean people say it works much better than they thought but its also been helped by the fact that there is some oversupply in the market and its been helped by the federal reserve fair enough when we look forward though i wonder with the sanctions theres gonna be a limit to countries working in russia theres gonna be a limit to the new technologies etc is russian oil production going to have to be crimped and its topped out well i think the first effect is going to be because of the importance of western technology capping russian lng development so thats going to happen sooner i think you know there were some projections a year ago that russian oil production would collapse quickly but the russians have the capabilities and while the western technology companies may have withdrawn these companies the 3000 people who work for them are still there working the fields so i think that there is going to be a decline but its going to be a slower decline at least it appears at this point because obviously the slow investment and the flow of technology and access to equipment and so forth but not the dramatic fall off the cliff that some projected a year ago is so hard to figure out in the oil market do you think we get to 60 first or 100 oh my gosh both no im not saying that im not saying that im just saying that i think that i dont think i mean the signs are were not going to have a major recession obviously alex theres always the risk of a political event a geopolitical event somebody connected to the war something happening in the middle east that we dont see happening now that affect it but if you look at where the market is in supply and you look to the second half of the year im not going to put a number on the price because whatever it is its going to be something else but a tightening market would pull up the price so that means but i love your answer of like both because i think that makes it really difficult for oil ceos for example to be able to make solid investment decisions and im wondering if the volatility in the commodity market is going to affect companies ability in the energy transition to invest i think that they have had you know theyve theyve done well and the revenues and i think you see their budgets going up both increased budgets for enp although theres some inflation there that has to be dealt with as well but also spending a transition i mean what weve heard here at subic has been really striking to me one is weve seen the strategies how theyre responding to the crisis focus on oil and gas but at the same time every single company has a low carbon strategy and theres much more clarity around the low carbon strategies this year than they were last year and of course a big factor in that is the irs and the great scale of incentives that are going to be made available in contrast as weve heard from some of the european ceos european rate nine new regulations yeah i was going to say is the carrot and stick thing and clearly the companies are going to like the carrot and not the stick do you think that europes going to change their strategy i think its hard for europe to do that theyre going to try and do it but they have 27 different countries and fiscal regimes and its so ingrained in their dna to write very detailed destruction instructions we heard from patrick for from thurtell today that their 10 page description of what of hydrogen that its very impenetrable to understand he was struggling with the vocabulary yeah no one hundred percent do you think that when people talk about the energy transition is that the correct phrase should we be calling it an energy transition well i guess so in the sense that you know when i was writing the new map everywhere i went i heard the phrase energy transition so i just i said what is an energy transition and went back and looked at it and the first energy transition began i went out on a limb january 17 0 9 when a british metal worker figured out you can make better iron with coal rather than wood but all these other transitions unfolded over a year and they were energy additions last year i mean oil overtook coal in the 1960s as the worlds number one energy resource last year the world used more coal than ever before three times what it used in the 1960s this is an effort to be an energy transition but its meant its so different because its trying to do in a quarter of a century what the world did over centuries and its trying to do it in a much more totally static way so the scale of it and the complexity i think has become more apparent over the last year its not as simple as just a scenario or a line on a graph its pretty darn complex energy diversity is that the better phrase energy and transitional diversity some people say energy transformation ok yeah i mean people will search for the word and i think but i think even if you talk to people in developing world for them energy transition has a different meaning for them its a billion people no longer using wood and waste to cook with but using lpt using an oil and gas product that for them is an energy transition last question i asked is of all our guests here at sarah week whats going to power my car in 10 years or whats going to flip on my light switch to power my car in 10 years well in 10 years theres a you know id say theres a lot depends on how long youre going to keep your car seven years ok second is ok i think theres a id say theres a 40 50 percent chance that youll be driving an electric car well see what happens to the metals and the minerals that are required for the energy transition so the incentives would be pretty strong to do that what if what will power your car it will increasingly be a mixture of renewables and natural gas the role of coal will go down it will be too soon for the next generation of nuclear power so i think the answer is what she said before diversity