Jeff Currie

Global oil inventories are lower today than a year ago, yet the price is suppressed by algorithmic trading and negative sentiment. The "Oil Glut" narrative has zero fundamental evidence. The market is physically tight but financially loose. Eventually, a physical catalyst (like a supply disruption in Iran or simple inventory exhaustion) will force the "paper" market to realign with the "physical" reality. Long Oil. The risk/reward is skewed to the upside as the "artificial" price suppression cannot last against physical shortages. A deep global recession destroying demand or a sudden peace deal with sanctioned nations (Iran/Russia) bringing supply back online.

Global oil inventories are lower today than a year ago, yet the price is suppressed by algorithmic trading and negative sentiment. The "Oil Glut" narrative has zero fundamental evidence. The market is physically tight but financially loose. Eventually, a physical catalyst (like a supply disruption in Iran or simple inventory exhaustion) will force the "paper" market to realign with the "physical" reality. Long Oil. The risk/reward is skewed to the upside as the "artificial" price suppression cannot last against physical shortages. A deep global recession destroying demand or a sudden peace deal with sanctioned nations (Iran/Russia) bringing supply back online.

Currie says, "If you're China, you're India, you're going to start to hoard oil and not only oil, but all commodities... The hoarding situation is going to become more extreme." The bifurcation of the world into two supply blocs (US vs. China) forces large importers to build massive strategic reserves. This creates a source of price-insensitive demand for hard assets, putting a floor under industrial metals and energy regardless of immediate economic consumption data. Long broad commodities and real assets. A strengthening USD which typically creates headwinds for commodities, or global recession.

Let's look at the equity market, energy, 3% of the market. How big are the things that are short? 53%. What is the multiple on that? Three, it's like 12 or 13. What is the multiple on the other one? 36 you're in trouble at the wealth level. The US economy is protected from energy shocks at the cash flow level (as a net exporter), but the stock market is dangerously unbalanced. As oil prices remain elevated due to structural hoarding and supply disruptions, capital will be forced to rotate out of high-multiple, energy-consuming sectors into low-multiple, cash-flowing energy producers to hedge portfolio risk. Energy equities are severely under-owned and mispriced relative to the broader market, making them a prime vehicle to capture the repricing of hard assets. A severe global recession could destroy baseline oil demand, offsetting the geopolitical and hoarding premiums currently supporting prices.

Jeff is a non-executive director at Abaxx Technologies. He highlights the need for better market infrastructure to trade "downstream" commodities like LNG and Lithium. The convergence of Web 3.0 (ledger technology) and AI allows for the creation of new, granular commodity markets that were previously impossible to trade. Abaxx is building the exchange infrastructure for these specific physical assets (LNG, Carbon). Long Abaxx as a play on the "Liquidity Explosion" in commodity trading infrastructure. Regulatory hurdles, technology adoption failure, or competition from established exchanges (CME/ICE).

We are seeing the "weaponization of the periodic table." Supply constraints are severe due to years of underinvestment, while demand is turbocharged by electrification, defense spending (5% of GDP in Europe), and AI data centers. Unlike the 2010s "asset-light" tech boom, the current cycle is "asset-heavy." AI requires physical infrastructure. Copper is the critical constraint for both the grid and data centers. Jeff explicitly notes that owning the equities (miners) offers a smoother ride than the physical commodities. Long copper miners as the primary beneficiaries of the "Bits meet Atoms" convergence. A global recession or a collapse in AI capex spending would temporarily crush industrial metal demand.

AI compute demand is creating an energy crisis. While Nuclear is the ideal solution, it takes decades to build. Natural Gas is the only scalable, immediate power source to bridge the gap between current AI demand and future Nuclear capacity. Jeff notes that while gas prices crashed from $7 to $3.20, the demand floor from data centers is rising. Long Natural Gas exposure. The current price weakness is a buying opportunity before the "summer of 2026" demand shock from cooling and data centers hits. Warm winter weather or faster-than-expected efficiency gains in AI chips (reducing power consumption) could keep gas prices depressed.

We are seeing the "weaponization of the periodic table." Supply constraints are severe due to years of underinvestment, while demand is turbocharged by electrification, defense spending (5% of GDP in Europe), and AI data centers. Unlike the 2010s "asset-light" tech boom, the current cycle is "asset-heavy." AI requires physical infrastructure. Copper is the critical constraint for both the grid and data centers. Jeff explicitly notes that owning the equities (miners) offers a smoother ride than the physical commodities. Long copper miners as the primary beneficiaries of the "Bits meet Atoms" convergence. A global recession or a collapse in AI capex spending would temporarily crush industrial metal demand.

AI compute demand is creating an energy crisis. While Nuclear is the ideal solution, it takes decades to build. Natural Gas is the only scalable, immediate power source to bridge the gap between current AI demand and future Nuclear capacity. Jeff notes that while gas prices crashed from $7 to $3.20, the demand floor from data centers is rising. Long Natural Gas exposure. The current price weakness is a buying opportunity before the "summer of 2026" demand shock from cooling and data centers hits. Warm winter weather or faster-than-expected efficiency gains in AI chips (reducing power consumption) could keep gas prices depressed.

Diesel inventories in the US are 11% below the five-year average, and Middle East crude is rich in diesel, making diesel particularly vulnerable to shortages as supply disruptions continue, which will push diesel prices higher.

"You've disrupted global supply chains. This is not just a disruption oil. It's gas, it's fertilizers, it's metals, it's petrochemicals." Natural gas is a primary feedstock for nitrogen-based fertilizers, and the broader supply chain for agricultural inputs is broken. North American fertilizer producers will benefit from immense pricing power as global supply is constrained and international competitors face feedstock shortages. LONG. Fertilizer producers will see expanded margins due to global scarcity and disrupted trade routes. Farmers reducing fertilizer application rates due to prohibitively high input costs, leading to a drop in sales volume.

"The ships are in the wrong places. Um, the insuranceances have been cancelled." Dislocated fleets and the cancellation of maritime insurance effectively remove shipping capacity from the global market. This logistical bottleneck will cause freight day-rates and shipping costs to skyrocket, directly padding the bottom line of maritime shipping operators who have available, insured vessels. LONG. Shipping companies thrive on logistical chaos and capacity constraints, which drive up their pricing power. A collapse in global trade volumes due to a recession, which would reduce the overall need for shipping capacity and cool off freight rates.

"You've disrupted global supply chains. This is not just a disruption oil. It's gas, it's fertilizers, it's metals, it's petrochemicals." Natural gas is a primary feedstock for nitrogen-based fertilizers, and the broader supply chain for agricultural inputs is broken. North American fertilizer producers will benefit from immense pricing power as global supply is constrained and international competitors face feedstock shortages. LONG. Fertilizer producers will see expanded margins due to global scarcity and disrupted trade routes. Farmers reducing fertilizer application rates due to prohibitively high input costs, leading to a drop in sales volume.

"You've disrupted global supply chains. This is not just a disruption oil. It's gas, it's fertilizers, it's metals, it's petrochemicals." Natural gas is a primary feedstock for nitrogen-based fertilizers, and the broader supply chain for agricultural inputs is broken. North American fertilizer producers will benefit from immense pricing power as global supply is constrained and international competitors face feedstock shortages. LONG. Fertilizer producers will see expanded margins due to global scarcity and disrupted trade routes. Farmers reducing fertilizer application rates due to prohibitively high input costs, leading to a drop in sales volume.

"Keep the hoarding down because we know what happened in the 1970s... try 3 million barrels per day on top of the disruption of somewhere around 18... China has been rewarded for doing just that... Japan and Korea, they're hoarding anything they can get their hands on." Beyond the initial supply shock, panic hoarding by nation-states and everyday consumers creates a massive, artificial demand surge. Upstream oil producers and broad energy equities will capture significant margin expansion and generate record free cash flow from these sustained, artificially inflated crude prices. LONG. Energy producers offer leveraged equity exposure to the hoarding-driven oil supercycle. Governments imposing windfall profit taxes on energy producers, or extreme price spikes leading to rapid demand destruction.