After 15 years of trending sideways, energy prices have broken to the upside:
After being stuck in a range for nearly 15 years, energy prices are now breaking higher. (Source: Thierry Borgeat via X)
That said, your best investment opportunity may not be in the obvious place.
First, a quick look at how we got here:
Oil had a huge run in the early 2000s and hit $100 for the first time in 2008. Then the financial crisis crushed demand, and oil prices collapsed. Prices recovered quickly enough to keep investors pouring money into shale.
Then OPEC increased supply in 2014, oil fell again, and the energy sector spent years in the penalty box.
During the Biden years, the height of global climate hysteria, big energy cut spending yet again, investors lost interest, and by 2020, the market got so distorted that oil futures briefly traded below zero.
Now, after years of low investment, global demand for oil and natural gas is higher than ever and is getting bid up. Energy demand did not disappear just because investors fell in love with AI, memory chips, green-energy projections, or policy targets.
Only smart insiders foresaw the Trump super deal moves on the energy map in Venezuela and Iran.
Now, the breakout of energy’s 15-year trend sets up a unique trade.
The “sweet spot” for oil companies is between $70 and $80 dollars. Hot enough to invest in new infrastructure… cool enough not to avoid blowing up consumer budgets at the pump.
Critics – President Trump included – accuse the industry of “war profiteering” or price gouging consumers at the pump when prices spike. Traders and industry leaders argue that high-cycle earnings are necessary to fund capital-intensive exploration and survive the inevitable lean years.
That’s the trade today. Instead of chasing the obvious oil producers, look at refiners and oil services companies profiting more directly from tight fuel supplies and strong margins.
Today’s Grey Swan Pro recommendation looks at exactly such a company – breaking higher well ahead of the trend.
~ Addison
