Has OIL topped?
Aren't we living in a non-binary world?
It’s as if these headlines summarize it all:
As Descartes famously quipped (and only about 2 years ago I figured out what it meant)
“I think, therefore I am”
Ergo, more oil produced means more supply, which means lower prices, right?
And the President and his cabinet are saluting OIL’s farewell.
FoxNews posted it,
But is it that simple?
If a peacetime dividend occurs and industry booms, wouldn’t there be a demand for energy
Wouldn’t there be a need to replenish the badly depleted SPR (the nation’s oil reserve)
Wouldn’t Trump want our oil producers and service providers to help rebuild, invest, and grow in the Middle East?
With peace in the Middle East, what will become of Russian oil?
Probably a lot more to consider
As my mentor James Dines often observed
”The nature of paradox is that what makes sense rarely makes money.”
Everyone assumes war is bullish for oil and peace is bearish.
The 1973 oil shock wasn’t the top in oil. It was the beginning.
Oil continued climbing for years, ultimately peaking in 1980 as inflation, geopolitics, and supply constraints worked through the system.
The obvious trade was wrong. The profitable trade came later.
So here’s the question:
If the market is expecting an oil spike from conflict, could the real opportunity emerge afterward?
Is this week’s panic the top?
Or the bottom?
And to add to the quirks of history: 1973 was the last time the Knicks won the championship, the US ended its war in Vietnam, and the Opec crisis.
Something to think about before you rush to sell your highly paying dividend Oil companies.
