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Daily Missive

Oil Insiders Seizing The Day

Loading ...Andrew Packer

March 19, 2025 • 5 minute, 48 second read


natural gasOil

Oil Insiders Seizing The Day

“The people of the United States don’t recognize it, but the oil industry has given the greatest gift to the people of the nation, and that gift is the low cost of energy. Bottom line is this enables the country to be very competitive manufacturing-wise and in the world economy.”

– Ray Lee Hunt


 

March 19, 2025 — Over the past 25 years, commodity stocks have been a core part of my investment philosophy. Lumber, natural gas, and copper stocks put me through college.

In the past 15 years of investment writing, it’s been my pleasure to cover the ups and downs in gold, silver, uranium, copper, lumber, and even hog futures a time or two.

And for most of that time, I could make one truthful claim: Whatever ups and downs a commodity had, it would never go to zero.

There would always be a real-world value. Or even speculative demand for something that was cheap enough. Even grains, which at times have bumper crops, aren’t valued at zero.

However, five years ago, as the pandemic shutdowns started, energy traders couldn’t get out of oil fast enough.

That’s not hyperbole. The last traders who needed to sell out became so desperate that the price of oil went negative. So much for the claim that a commodity could never go to zero!

At the peak of the oil sale mania, oil traded for negative $40 per barrel.

Technically, nobody was taking a barrel of oil and getting paid $40 to do so. Nor were you getting paid $25 to fill up at the pump. It was an expiring futures contract that went negative and burned investors who stayed in oil too long.

In a world where nobody was driving, it was hard to see a climb out. Yet oil did climb out, moving sharply back to positive territory. Shortly after Russia invaded Ukraine, oil prices spiked to over $100 per barrel.

Since then, they’ve drifted back down.

2024 was a poor year for oil, with prices declining about 20%. However, looking at the five-year chart, we can see that oil’s decline is now lining up with potential support around the $60 price range:

Turn Your Images On

If you’re a swing trader, that’s the kind of price level where you’d want to buy oil or buy oil stocks for a possible bounce. Seasonally, oil rises into the summer months, coinciding with the peak driving season in the U.S.

Of course, right now, there are some fearful headlines for the oil industry. There’s rising talk of a recession. Reduced global trade from tariffs. And President Trump’s call to “drill, baby, drill,” encourages more production.

More supply, all else being equal, means lower prices. Good for consumers, but that’s usually not good for energy producers. Or is it?

Oil could be ground zero for the phenomenon of what we call “winners and losers.”

Simply put, capital will start to move into specific sectors or even specific stocks… and their prices will rise. But capital will also flow out of specific companies that could fall behind.

The MAGA agenda of low taxes, deregulation, and tariffs will not create a straight line higher for stocks like we had in 2023 and 2024. We’re already starting to see the market split out the companies that can thrive under these conditions and which will suffer.

An Industry Insider’s Perspective

To get a sense of what this means, I spoke with the folks at Prairie Operating (PROP). As you may recall, last September, I toured their drilling operation in Eastern Colorado.

I was impressed with their combination of fracking tools and AI technology to find optimal drilling sites. Prairie is able to profitably produce oil at today’s prices and to do so in the state with the toughest environmental laws.

I’ll admit I expected to hear a mixed sense of today’s markets from the Prairie team. After all, pro-drilling policies are good for the industry. But not to the point where prices take a hit.

Yet the investment team was pretty happy. In fact, Prairie recently acquired about 24,000 acres of production, increasing their reserves by nearly 78 million barrels of oil.

Prairie executives tell me that the buy was made from a private seller and that Prairie expects to continue expanding production. Oil could even break below its three-year support price of $60, and they’d still be able to make a profit.

This could be a sign of a broader change underway in the energy sector. Instead of seeing big swings higher or lower, the industry will benefit from today’s conditions by consolidating.

Investors who bought oil assets expecting to sell for $80+ per barrel are likely disappointed with their returns, as oil is currently at $65.

Over the next few years, a low-cost, AI-powered energy player like Prairie has its game plan in place: Buy when there’s an opportunity to get a reasonable valuation, and find ways to further drive efficiencies.

In a way, it’s a bit odd to see. But at much higher prices, the capital moving into the oil market would be unsustainable in time.

The next few years could provide a chance for conventional energy companies to substantially improve their efficiency and operations. That could include more transactions involving privately held oil lands, or larger oil companies could acquire smaller players to increase their reserves.

The chances of oil prices going negative again are zero. Since it’s already happened once, we can’t rule out it happening again. But it’s incredibly unlikely. Especially in the new era of “drill, baby, drill.”

But this is just another sign of what Addison and I see happening in the MAGA economy: Some stocks will be winners, and some will be losers. As we can see with oil, it applies to asset classes as well.

Yes, oil prices will likely keep trending lower after a summer rally. Investors can likely see a moderate bounce in oil and gas stocks in the months ahead.

But after that, it’ll be harder to find winning stocks as increased drilling and lower prices become the norm.

But that doesn’t mean that every energy stock will be a loser. Finding the highest-margin operators in today’s conditions will be crucial for future success.

We’ve just put together new research on the energy space with a specific niche that looks like a clear winner no matter where energy prices go. It’s an area where the MAGA agenda fits in nicely, especially if, as we expect, some of the trade war headlines cool in the months ahead as some more favorable trade deals are struck.

Regards,


Andrew Packer,
Grey Swan

P.S. Our latest research on the real, unique, story behind the border crisis with Mexico is available to paid-up Fraternity members in our Library of Special Reports.

Please send your thoughts on stocks and sectors that may be winners and losers in the MAGA economy to addison@greyswanfraternity.com.


Earnings Trump the Trade War Tango

October 15, 2025 • Andrew Packer

Amid the latest tariff tantrum, it’s also earnings season again. The big banks have fared well, with sizeable earnings beats so far.

The king of the Wall Street TBTF banks, JPMorgan Chase, led the way.

Quarterly profits topped $14.4 billion, up 12 percent from the third quarter of 2024. Revenues hit $46.4 billion, up 9%.

The bank did disclose a $170 million loss, following the bankruptcy of Tricolor. The company is a lender in the subprime automotive space.

Compared to JPMorgan’s size, this is but a trifling rounding error, and by no means should investors see it as a sign that marginal borrowers are facing trouble.

Meanwhile, JPMorgan executives reiterated that consumers remain generally “resilient” and mostly on time with credit card payments.

Earnings Trump the Trade War Tango
Parallel Mike: The Silent Pact

October 14, 2025 • Addison Wiggin

Gold’s breakout is only Stage One — the prelude. It will continue until the lights go out on the existing order — until the system itself is deliberately imploded. For those who missed it, I went into detail as to how I forsee the revaluations working in my recent piece ‘The Relentless Revaluation of Gold’. In this regard, gold’s rapid rise should be seen as the lighting of the fuse; what follows is the detonation that brings down the buildings. Whether the trigger is a cyber crisis as the Polish Central Banker insinuated, a global conflict, hyperinflation, or all of the above, the mechanism is already armed.

Stage Two will emerge in the ashes of that financial cataclysm and it will be the unveiling of a new financial architecture — built around blockchain and digital currencies, with gold restored at its core as the international monetary anchor for settling contracts. As such, every asset, every liability, every illusion of value will have to be revalued against it — forcing a reckoning with decades of debt, debasement, and deceit.

Parallel Mike: The Silent Pact
Tariffs, Tokens, and the Battle for the New Dollar

October 14, 2025 • Addison Wiggin

As markets have the helm, it almost feels like a footnote that the U.S. government shutdown has entered its third week. Tomorrow will be the first round of missing paychecks for non-essential federal employees. The effects are spreading — IRS phone lines dark, national parks shuttered, flight delays piling up.

“Every week this drags on, GDP loses a decimal point,” said Moody’s chief economist Mark Zandi. As for markets? Axios summed it up this way, “The data blackout may soon rival the shutdown itself.” Private sources will have to make up the difference. Given the BLS’ track record over the past several years, that may not be such a bad thing.

Tariffs, Tokens, and the Battle for the New Dollar
The Bull Market Turns Four

October 14, 2025 • Addison Wiggin

Our current bull market is stronger than average, coinciding with the retail rollout of ChatGPT.

In year four, we could expect smooth sailing – except this year we’re in the early stages of a terrifying bull market, driven by investors getting out of a weak dollar, not anything fundamentally sound in stocks.

For now, the bulls are clearly in control. And, as we saw yesterday, investors are likely to lap up stocks and other risk-on assets on every dip.

The Bull Market Turns Four