Oil and gas giant Woodside Energy Group [ASX:WDS] shares are up by 1% today, trading at $37.62 per share as commodity prices continue to rise.

LNG and oil are up today, with Brent crude and WTI oil above the 52-week moving average price. Signs of tighter supplies and pledges from Chinas leaders are the primary drivers as oil continues its fourth week of gains.

The timing could not be better for Woodside, who faced downward pressure last week after releasing its second-quarter report, which showed production and revenue were down from Q123.

Despite bumps in Q2 performance, Woodsides share price is still up by 22.46% in the past 12 months as more investors move into the supply-constrained sector and realise the limitations of the promised energy transition.

Source: TradingView

Woodsides quarterly update

Woodside shares are up 1% today, reversing any losses in share price after a shaky second-quarter report released last week.

Despite delivering fairly reliable production and sales volume, both experienced declines compared to the previous quarter due to planned turnaround and maintenance activities.

The company delivered quarterly production of 44.5 MMboe (489 Mboe/day), down by 5% from Q123.

As a result, revenues decreased by 29% from the first quarter with an average of $63/boe.

Woodside CEO Med ONeil commented on the Q2 update, saying:

Strong underlying operational performance in the second quarter was impacted by planned turnaround and maintenance activities, particularly at the onshore Pluto LNG facility and associated offshore facilities in WA.

Full-year production guidance remains unchanged at 180190 MMboe as maintenance will be offset by the early production at the new Argos platform ramps up.

The Argos platform began production in April this year...

Our neighbour came over for an apero yesterday. She told us about her poor father:

Hes 96 years old. He and my mother have been married more than 70 years. But he pointed to her last week and asked me: Whos that woman?

Its sad. Hes lived in that house for 50 yearsbut he cant remember where the bathroom is.

When he got the COVID virus, we all thought he was going to die. But he just lost his mind.

What has to happen will happen, sooner or later. Often, it takes longer than you expect.

The Fed has increased its key lending rate faster and more than any Fed ever did. But the stock market hasnt crashed. Unemployment is still low. And were still waiting for the recession.

How come?

The big switch

Last week, we were exploring the issue. The secret, we believe, is that the federales have lost their minds. The Trump Team went bonkers in the COVID Hysteria with a deficit of US$4.2 trillion in 2020then the Biden Bunch followed up with another US$1.4 trillion deficit in 2021.

In the meantime

Its still inflate or die. But now, consumer prices are coming downand the economy still lives. The reason, we believe, is that the source of inflation has largely switched from the monetary front (the Feds interest rates) to the fiscal front (federal deficits). The Fed is still lending at around zero cost in real terms. But now, in addition, the federal government is running the biggest budget deficits in history.

Inflation refers, technically, to an increase in the money supplywhich typically leads to an increase in prices. In todays global economy, you dont even have to spike your own punchbowl; about half of the worlds central banks are still lending money below the inflation ratesome as low as 6% below consumer price increases. Some of it is likely to leak in your direction.

But there are other ways to enliven a party. Turn up the music. Bring in a stripper. Pass out the hard drugs.

For the last 12 months, the US Government has been throwing the biggest shindig in history spending about $130 billion per week or nearly 14% more than the year beforeand 40% more than before the COVID era blowout.

Bank bailoutsthe slaughter in Ukrainea boondoggle for the silicon chip industry it adds up. And now, Government spending is headed toward 39% of the US economy (see below). Not since the Second World War has so much of US output been squandered by the Government.

Bananaless republic

The federales are taking charge of everything deciding which industries will prosper and which wont which news reports are disinformation, and which are truthtelling foreigners what kind of governments they must have, where their borders should be, and with whom they should trade...

For those baffled by Wall Streets miraculous recovery in 2023, todays morning edition of Sky News solved the mystery

Bad news for the Bullspark rangers have now released the Bear.

Watch out. Grrrrr.

Two long term trends on a collision course

In last Tuesdays Daily Reckoning Australia, we looked at the powerful drivers that propelled the S&P 500 to an extraordinary 48-fold gain over the past four decades.

The period of gain which has been almost, but not quite, all my adult life is why we expect the share market to be our retirement benefactor for the remainder of our adult lives.

It has gone on for so long that we simply expect itll continue in a business as usual fashion. But thats not how long-term cycles work.

There are prolonged periods of outperformance followed by underperformance.

Even the US Federal Reserve recognises the factors behind the last four decades of outperformance on Wall Street, are all but exhausted.

To quote from last weeks Daily Reckoning Australia

In June 2023, the Fed published this discussion paper