Energy’s 15-Year Breakout

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

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:

Then OPEC increased supply in 2014, oil fell again, and the energy sector spent years in the penalty box.

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.

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

Copper and resources are sending us a cleaner market signal than AI stocks.

Channeling Ludwig von Mises, we observe this morning that price is not just a number; it’s information. Price reflects what buyers and sellers collectively believe: demand, scarcity, fear, speculation, disappointment, future expectations and available supply.

When prices rise, and inventories fall at the same time, the message is usually straightforward: buyers need the stuff, and there is not enough of it.

A low VIX does not predict disaster. It measures complacency. A serial skeptic will read it as the calm before a storm. We shook off that feeling this morning and opted to pursue an opportunity instead.

Here goes:

A VIX reading below 15 means the market is not pricing in much near-term trouble, even though there are obvious risks still sitting in the room: Iran, oil prices, memory chip speculation, circular financing, high valuations, epic high concentrations, spiking long-term interest rates, a regime change at the Fed, a meltdown in Japan and a historic deficit and rising national debt.

Money is not flowing in a clean, straight line from outside investors to productive businesses. The firms at the top are investing in and buying from each other.

Microsoft and OpenAI are the easiest examples to follow.

Microsoft says OpenAI has contracted to purchase an additional $250 billion in Azure services, while Microsoft continues to account for $13 billion in funding commitments to OpenAI as an investment.

At this stage, it’s a stock picker’s market.