00:00There's two words that stuck out for me in your recent work, and that's abundance, illusion.
00:06Can you just sort of flesh that out for us and why that's so important, perhaps more so, at this
00:11specific moment?
00:12Well, I think when we look at round one of what occurred in the Middle East,
00:18the immediate response was the U.S. to use strategic reserves, and we saw it in Japan, Europe, and elsewhere
00:24around the world,
00:25and they used it aggressively. China was flexing its system. Between the two of these, it created the illusion of
00:31abundance.
00:32But products are telling you, we don't have an abundance out there.
00:37You know, I like to point out, you know, crude oil prices are the noise. Product prices are the signal.
00:43The crack spreads this morning are $70 a barrel.
00:47That means the spread between oil and products is nearly the same price of crude oil.
00:52I've never seen it that high in my entire career of over three decades.
00:56That's telling you, this is no longer a question of deficit. This is now a question of shortage.
01:01And people are asking, where do you hide with what's going on in tech?
01:06Where you hide is commodities. They are the best-performing asset class year-to-date, up 34%.
01:12Petroleum index alone is up 81%.
01:16And the upside is just that much greater between now and the end of the year,
01:20given the shortages that we're seeing across the energy complex.
01:23And if you put what occurred, you know, round one, we got rid of the insurance policies, the cushions.
01:30This time around, we're starting from record low inventories.
01:34We have the Red Sea in play. We have the Straits of Hormos in play.
01:37We have the Black Sea in play. We have refineries in Russia all out.
01:41The list goes on. In fact, I'd argue in my entire career,
01:44I have never seen an energy environment this tight, yet the world still focuses on tech
01:50that I think is poised for a big correction.
01:53And you have the best-performing asset class out there being ignored.
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