00:00By the time we get to the midterms, Paul, I think that front crude oil contract will be closer to
00:0550
00:05than 100. Right now it's $73 a barrel. That's the December contract. So in futures and combined,
00:11it's like to say we're going where the pucks, skating where the pucks go. Well, that's where
00:15it's going. The high was 78. So the front contract was unable to get above 100 and now it's taking
00:21down, but we have good reasons. So I think that high we put in this year around 120 is going
00:25to
00:25last for years. Very similar to 130 in 2022 and 147 in 2008. And the key question is now we
00:33have
00:33the bottom line is we have the leader of the world's most significant energy producer, net exporter of
00:39crude oil, natural gas, who wants prices lower and there's election in November. So to me, that's
00:45where it's going. So you see it all lining up. How long does it take before we see prices at
00:50the pump?
00:50How diesel prices, propane prices start to fall in tandem?
00:56Scarlett, I'm glad you went there. So we got to $4 or $3.96 or so in the average gallon
01:01of gasoline
01:02in this country. I think that's the peak, right around $4. Diesel, right around $5.30. I think
01:08that's probably the peak. How much lower they go, good example. We've never gone this high in
01:14gasoline, typically drops around $2 a gallon. I think that's going to happen. There's one key theme.
01:19There is a key point this morning, our morning meeting. Chris Cain, our equity strategist,
01:23pointed one thing that's happening, the S&P 500 dropped below its 200-day moving average,
01:27but volatility is still too low. So what I think is once we have volatility coming from the energy
01:33market and the gold market, tricking over the stock market, that's part of your pressure to make all
01:38these prices go lower and potentially have crude oil go back to the level I've been looking for forever,
01:42which is $40 a barrel. That's been the bottom for three times since 2008.
01:48So, Mike, there are reports that there has been, as a result of the war and attacks by Israel-Iran,
01:55some damage to some of the infrastructure in the Gulf region here. Does that argue for
02:01maybe a little bit higher than the normal levels, given there might be a supply constraint for a number
02:07of years? Paul, that's part of that global recession that's really helping, hurting the rest of the
02:12world. The U.S. is a net exporter of crude oil, natural gas, corn, soybeans, and wheat. And the key
02:18theme there is probably natural gas for the rest of the world, most known to Europe. That's a problem.
02:23A lot of that Qatar natural gas cut out might take years to bring that back on. But in the
02:27U.S.,
02:28it means a glowing glut will have to export. So that's why it's really significant. But this,
02:32to me, is part of that trigger for that global recession that we already were heading to
02:36potentially, partly because they're all fighting tariffs. So now it's about, as long as the U.S.
02:42can repress the ability for Iran to have offensive capabilities to close the strait, which we're
02:47kind of getting there, gold's already figured that out, then this is probably a peak we're going to
02:50see for years in crude oil this year. I'm glad you bring up gold. I wanted to go there next,
02:55because we've seen gold pair its losses. It's now down only 2.1 percent, but it's still
03:00a long way off from the peaks that it made at the start of this year when it hit
03:04a closing high of 53.54. Has that bull run ended? I mean, is that the top here?
03:11Yeah. We know who to blame. I think that bull run's over, Scarlett. It's
03:14very similar in things to 1980 and the peak in 2011 as far as of high velocity. Gold was the
03:21most
03:21expensive ever versus Bloomberg commodity index at the end of February and the highest in almost 50 years
03:26versus 60-month moving average. So it was a tremendous front-runner indicator for what's
03:30happened. It bought the rumor, now it's selling the fact, and now it's just way too expensive,
03:35same in silver. And typically when you put in highs like this, you do at this kind of velocity,
03:39they last for years. So I think it's going to languish. Thank you very much. This has been a
03:43great bull market and it's done.
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