Energy Sector

[Gregmal]

14 minutes ago, Blake Hampton said:

And when you say "esoteric financial instruments," I assume you're talking about derivatives?

I have no way of timing this stuff. All I know is that we are on a path towards disaster if nothing changes, and at this point, I'm basically certain that it won't. But I don't know when, no one does. It could be tomorrow or it could be in ten years. But there's no doubt it'll be big. It'll scare people too.

I kicked myself for a while not buying VIX calls before Liberation Day though. I knew it was gonna be a doozy.

Yes theres plenty of financial products, derivatives, etc that you can persistently play to hedge tail risk. If you think bonds blow you can allocate to futures options. You can pair trade. You can do lots of things; and essentially turn the marketplace into a profitability center for yourself almost irrespective of directional wagering. It's a big part of what I did for a good chunk of my career. I mean heck, even just selling puts on modest amounts of Berkshire at a price you'd find appealing generates some extra alpha. Rolling oil futures options. Find a well run small cap energy company and sell puts as the IVs are usually quite high on those. Even if not fully comfortable, @SharperDingaanhas mentioned many times about the model that I'd subscribe to; plant some seeds, harvest, repatriate some profits, and then reinvest. Eventually your repatriated profits pay down your mortgages, car loans, student loans, whatever. 

 

You can do math. The math on how ridiculous it is to ever get to a comfortable place in life without getting help from investments in just ludicrous. At $200k a year average salary, which is $150k per year after tax lets call it, with $50k of necessary expenses(thats low), you gotta do that for 20 years to save a couple million bucks. And guess what? I'd wager most folks never make $200k per year, and those that do tend to start only after working for a decade or more. You gotta find escape velocity with your finances somewhere. 

[Castanza]

58 minutes ago, Blake Hampton said:

I have no way of timing this stuff. All I know is that we are on a path towards disaster if nothing changes, and at this point, I'm basically certain that it won't. But I don't know when, no one does. It could be tomorrow or it could be in ten years. But there's no doubt it'll be big. It'll scare people too.

 

You have the answer to the test but choose to ignore it....You can't time it so why are you trying? 

 

For simplicity sake, say you sat on 100k cash the last 10 years. You would have to average almost ~17% annually for the next 35 years just to break even with average market returns (10% annual). I know there are some astute investors on here (cough gfp) who have averaged better than that. But why the Hell would you want to make that your minimum required hurdle rate? Further, every year you're between 0 - (10%) that adds an additional ~.5-1.5% required annual return increase moving forward to break even at year 35 (rough math). 

 

Food for thought.

 

 

[influx]

On 6/2/2026 at 8:39 AM, Gregmal said:

I’d just pay attention. I mean the world slowly seems to be waking up to the idea that it’s not worth the woke points or whatever they get neglecting their energy infrastructure and fossil fuels. Capex is increasing. These prices, even though not even high, are a boon to anyone producing and an incentive to produce more. Why should oil be higher, let alone substantially higher? Because of things that already happened? Oil is not scarce, everyone has it and with some money in the ground can access it. 

 

If there’s one thing that’s certain, it’s that the oil cheerleaders constantly lie and exaggerate. How many times have we been promised $200 oil? And yet the only times it’s ever even gotta past $100, it’s short term, penny stock pump and dump style quick spikes. The bulls are also ALWAYS convinced oil should be higher. The same way stock market bears are appalled anytime we have a green day. They just  inherently believe that “the market deserves to be down and oil needs to be way higher”. It should be obvious just from watching that the only time oil goes up is when there’s some sensational media driven news flow. $70 a barrel is largely where there seems to be a healthy equilibrium. 

 

Okay. I am sorry, but I am not sure what are you watching? You are talking about cheerleaders and sort of saying the price is right because it is the market price and cheerleaders were wrong in the past. I read the other posts as well of yours (back and forth with @kab60).

I understand why the price may be right at the moment, but love to know why you think this price is right in the next 3-6-12 months?

"What would cause you to change your mind? Do you have any parameters / variables that you are watching, assuming you are following this closely? "

I am not talking about the long-term. I am bearish medium to long-term. All sorts of supply or workarounds will be put in place. There is a sequence risk though (to the price).

 

Facts are:

1. Jawboning (and/or managing the futures market). Why would they do that if there is no issue and the price is fine?

2. SPR releases because there is a supply problem. This is a temp fix.

3. Is it not the first time we have a supply risk and issue of this size? 

[Paarslaars]

5 hours ago, Gregmal said:

And guess what? I'd wager most folks never make $200k per year, and those that do tend to start only after working for a decade or more. You gotta find escape velocity with your finances somewhere. 

 

Not to mention those who do, worked hard and long to get there, they want to start reaping the benefits.

So they easily spend >100k a year, trapping them in the rat race until they retire. 

[SharperDingaan]

The US going to sh1te is not a bad forecast; but the reality is that we can only proactively react. The long straddle, the swing trade, BTC, etc. Tools that are worth mastering.

 

There is no point to 'winning', if after the fact ... you are forced to live in a shit environment. Mastering BTC is about ability to move wealth around the world, despite capital controls imposed by central banks.

 

Anxiety is one thing, but turning it to advantage puts it back under your control ..... not venting. The vehicle is ability to make volatility your friend.

 

We aren't fans of Orange Boy, but his disruption has been very profitable. Punchcard opportunity, particularly if there is a Kennedy moment tomorrow.

 

Best of luck

 

SD

 

Edited June 3 by SharperDingaan

[Gregmal]

7 hours ago, influx said:

 

Okay. I am sorry, but I am not sure what are you watching? You are talking about cheerleaders and sort of saying the price is right because it is the market price and cheerleaders were wrong in the past. I read the other posts as well of yours (back and forth with @kab60).

I understand why the price may be right at the moment, but love to know why you think this price is right in the next 3-6-12 months?

"What would cause you to change your mind? Do you have any parameters / variables that you are watching, assuming you are following this closely? "

I am not talking about the long-term. I am bearish medium to long-term. All sorts of supply or workarounds will be put in place. There is a sequence risk though (to the price).

 

Facts are:

1. Jawboning (and/or managing the futures market). Why would they do that if there is no issue and the price is fine?

2. SPR releases because there is a supply problem. This is a temp fix.

3. Is it not the first time we have a supply risk and issue of this size? 

I'm not really looking to make forecasts off a short term guessing game. The only paths to "much higher oil" seem to be based on the prevailing notion that "it should just be higher". "Higher" ignoring that oil is already "way higher" in response to "reason oil should be higher", and that historically, going back decades, these super spikes, even if they occur, are generally short lived. 

 

Additionally, is it not believed that every major and minor oil producer right now is not chomping at the bit to get every ounce they can out of the ground at these prices? Once the SOH issue is resolved it seems really obvious oil prices are absolutely going to tank. Probably lower than pre war even. In between? We ARE already elevated. Of course in the short run anything can go anywhere, but Im not sure why anyone would predicate their investment outlook on "maybe we spike to 200 briefly over the next 3-6 months before returning to normal levels".

[Cor]

7 hours ago, SharperDingaan said:

The US going to sh1te is not a bad forecast; but the reality is that we can only proactively react. The long straddle, the swing trade, BTC, etc. Tools that are worth mastering.

 

There is no point to 'winning', if after the fact ... you are forced to live in a shit environment. Mastering BTC is about ability to move wealth around the world, despite capital controls imposed by central banks.

 

Anxiety is one thing, but turning it to advantage puts it back under your control ..... not venting. The vehicle is ability to make volatility your friend.

 

We aren't fans of Orange Boy, but his disruption has been very profitable. Punchcard opportunity, particularly if there is a Kennedy moment tomorrow.

 

Best of luck

 

SD

 

For those of us less familiar with the Kennedy era and stocks at that time, what exactly are suggesting by “Kennedy moment” in the context of  Mr. Market?

Edited June 3 by Cor

[yesman182]

19 minutes ago, Cor said:

For those of us less familiar with the Kennedy era and stocks at that time, what exactly are suggesting by “Kennedy moment” in the context of  Mr. Market?

i assume he is referring to be assassinated 

[SharperDingaan]

1 hour ago, Cor said:

For those of us less familiar with the Kennedy era and stocks at that time, what exactly are suggesting by “Kennedy moment” in the context of  Mr. Market?

 

1963 assassination of John F Kennedy, the US president at the time.

https://en.wikipedia.org/wiki/Assassination_of_John_F._Kennedy

 

No more Trump, no more tweets, no more disruption, no more MAGA, yada, yada ..... in an instant.

US indices drop violently, then rebound quickly to well above previous levels ..... as the world processes the implications.

 

Celebrations in the worlds streets, and global market contagion, feeding back into the rebound. The very normal reaction when dictators are deposed. Might be less celebration in the US (Home Land Security/ICE presence) .... but not in the rest of the world.

 

Black Swan punchcard opportunity.

 

SD

Edited June 3 by SharperDingaan

[73 Reds]

9 minutes ago, SharperDingaan said:

 

1963 assassination of John F Kennedy, the US president at the time.

https://en.wikipedia.org/wiki/Assassination_of_John_F._Kennedy

 

No more Trump, no more tweets, no more disruption, no more MAGA, yada, yada ..... in an instant.

US indices drop violently, then rise as the world processes the implications.

 

SD

Hmm, for someone who prides himself on the law of probabilities, you seem to spend a lot of time focusing on an extreme long shot.

[SharperDingaan]

14 hours ago, 73 Reds said:

Hmm, for someone who prides himself on the law of probabilities, you seem to spend a lot of time focusing on an extreme long shot.

 

Nah .... we're just ensuring that we have the tail risks covered  Low probability, high impact events, cheap to maintain; but Lenny ...... if it comes to pass  ..... despite best efforts, a tax bill greater than the last decade of salary and bonus combined. 

 

Shitty way to make a buck, but this is Trump, and no different to any other dictator. He'd appreciate it!

 

SD

 

Edited June 4 by SharperDingaan

[Gregmal]

Funny a couple days go by without any pump pieces and its already giving it back...

[SharperDingaan]

6 hours ago, Gregmal said:

Funny a couple days go by without any pump pieces and its already giving it back...

 

Hard to complain, as we used it to close out a swing trade, ahead of an ex-date on the 15th. Markets may not be rational at times, but it doesn't mean that the investor has to be irrational as well. The value is in calling the bluff; not for everyone.

 

SD

 

Edited June 6 by SharperDingaan

[ratiman]

It seems like the overwhelming consensus is that oil is headed back down after a transitory spike. Institutions are bearish while professionals are alarmist. (via Paolo Macro on X) 

 

 

[Gregmal]

Paolo is an attention seeking Twitter clown lol

[influx]

Tank bottom questioned. He says this is the largest supply disruption. Both can be true for a period of time   

[influx]

Referenced by Doomberg and few others. Bearish view:

https://jj745.substack.com/p/a-personal-note-to-a-reader

[SharperDingaan]

When the CEO's of the majors have been privately warning the US administration of critical inventory levels starting July, I'm inclined to take their word for it. I'm also inclined to think that the administration doesn't want to hear it, punting for a SOH opening by the end of the month.

 

Some need the war to continue, others just want to go home. Greed suggests an earlier vs later SOH opening, and the resultant lower crude price. 

 

Until there is a resolution, expect volatility to continue.

 

SD

 

[Gregmal]

Too many people think about oil like a stock. It’s not, it’s purely supply and demand on the final scale where settlement occurs. 
 

For instance, here’s Marco Polo doing his thing in 2022. So hilariously cringe because the religious experience seemed to have been calling the top on oil, and assuming one takes their own investment advice and isn’t just peddling newsletter scripts, bagheld until….just the last few months. When, once again….Mr Polo smugly thinks he’s on the cusp of calling some huge generational surge lmfao 

 

 

[SharperDingaan]

Back to our original share counts in o/g, after multiple round trips

 

Refiners have been sucking hard on US inventory. Combined weekly draws and SPR releases have been in the 16-18M bbl/week range for the last 3 weeks; this week not expected to be much different. API numbers publish Tuesdays > 4pm EST, EIA numbers publish Wednesdays > 10:30 am EST, SPR numbers typically delayed and late in the week. Most would expect that whatever the SOH resolution, the globe will need to approve a 2nd coordinated SPR release in July.

 

The pending SpaceX IPO has been sucking liquidity out of our fishing pond. We have repeatedly closed out swing trades, in volume, at much higher downside volatility than normal, on what are very routine market changes. What might normally have required multiple trades, and a day to fill, now filling on a single trade within 15 minutes.    

 

Gains parked in cash, waiting for the SpaceX ticker to begin trading, and further rotation out of BTC ... lowering prices. All goes well, we close out a January O/G-BTC pair-trade, and restore a BTC position as well. 

 

Enjoy the party, but it's a good time to take risk off the table; quality o/g, high dividend payers, and higher BTC/cash. Should the market experience a 'hiccup' over the rest of 2026, you'll still get well paid every month, and have the means to take advantage. 

 

Good luck.

 

SD

 

 

[Spekulatius]

Buy low sell high. Thats all you need to know when dealing with energy stocks.

[Hoodlum]

Russia will be lowering exports of oil during June, due to shortages from Ukraine drone attacks on oil facilities. 
 

https://oilprice.com/Latest-Energy-News/World-News/Russia-Slashes-Oil-Exports-As-Fuel-Shortages-And-Drone-Attacks-Bite.amp.html

 

 

Russia is preparing to sharply reduce crude oil exports this month as mounting refinery disruptions, fuel shortages, and Ukraine's bombing campaign force Moscow to divert more barrels into the domestic market. 

Exports from Russia's western ports of Primorsk, Ust-Luga and Novorossiysk are expected to fall to roughly 1.7 million barrels per day in June from 2.5 million bpd in May, according to Reuters calculations based on preliminary industry and trading data. The decline comes as Russia seeks to increase refinery throughput to address fuel shortages reported in several regions while also contending with lower crude production.

 

In the latest wave of airstrikes targeting Russian oil infrastructure, Ukrainian officials on Monday said forces struck the Grushovaya oil transshipment base near Novorossiysk overnight, one of southern Russia's largest oil and petroleum export hubs, while also targeting oil facilities in the Volgograd region and fuel storage sites in Russian occupied Crimea.

 

Edited Wednesday at 01:40 AM by Hoodlum

[ratiman]

If it doesn't get to $6 gas I will never listen to any oil bull ever again. If shutting down ME oil for 3 months hardly moves the price then it's basically no more scarce than salt water. 

Edited Wednesday at 01:32 PM by ratiman

[yesman182]

7 hours ago, ratiman said:

If it doesn't get to $6 gas I will never listen to any oil bull ever again. If shutting down ME oil for 3 months hardly moves the price then it's basically no more scarce than salt water. 

Haha I hear ya. One thing I saw this week that I hadn't previously realized, is just how much China has cut its imports. Seems like the article said they are importing like 1/2 of what they were pre conflict. So the worlds largest buyer basically is taking a pause. That doesn't explain everything, but it does help me understand why the price didn't climb like I would have thought. 

[kab60]

19 hours ago, ratiman said:

If it doesn't get to $6 gas I will never listen to any oil bull ever again. If shutting down ME oil for 3 months hardly moves the price then it's basically no more scarce than salt water. 

You should never listen to oil bulls. If anyone had much success trading the worlds largest and most liquid commodity, they wouldn't spend all day on X.

 

Anyway, as someone with 15% of my portfolio in a Canadian SAGD producer ($IPCO), I'm not sure I really want anything more than 90-100 USD oil. I'd much rather a long period of sustained higher prices than a massive spike, which leads to demand destruction as well as an acceleration in alternative energy sources and most likely lower-through-the-cycle-FCF.

 

(and by 'higher prices', I mean something in the range of $70-80 for a couple of years, which is fine for economic growth and a lot of earnings for the industry. And inflation-adjusted, it's really nothing special).

 

The most obvious reason prices aren't higher is that oil inventories were very, very full going into the conflict. The longer it drags out, the more those inventories get drawn down. I have no clue on tank bottom or whatever the oil bulls are pitching, but it makes sense that massive inventory draws will most likely mean there's a higher bid for oil post-conflict, if the US and China decides to restock their inventories.

 

The joker in all of this is obviously Iran. They seem to have figured out Trump as well as the leverage they hold. I really don't see why it would be in their interest to end the conflict, before they've really hurt Trump. It's the first time anyone has really stood up to him and told him to fuck off. He's obviously frustrated with the lack of progress, but it's hard to see an easy way out. I don't know how much leverage China holds over Iran and whether they'll eventually force a deal, but I think Trump made a massive mistake, and it would make sense for Iran to take every pound of flesh that they can.