I think it's easy to read into what Doomberg says and for it to feel bearish. Who knows if G&R and HFI are right on US shale rolling over - but it's an interesting hypothesis, and one that will indeed be proven one way or the other in 2025/ 2026 (exciting times).
The importance of this hypothesis is critical to geopolitics. Oil is fungible (meaning that it does the same thing whether we buy it from Texas or Saudi Arabia - ignoring crude grades), but the location matters immensely! I stand by the idea that US exceptionalism has been partially driven by US energy exceptionalism driven by the shale patch. Economic activity is energy transformed - and no other nation has ever achieved what the US has done in harnessing the power of energy.
If that is going away - meaning the US is no longer the marginal producer of barrels, then we have a see change in the global order coming.
The common thread between Crude Chronicles and Doomberg is gold. I strongly agree with Doomberg that gold is the true medium of exchange, or at least the true equalizer or leveler in terms of prices and value.
What Crude Chronicles is saying is that preceding every major oil shock has been some sort of debasement of the dollar. He doesn't say what that is going to be, just that it's due. I'm a believer in cycles and all the cyclical folks are pointing to deep turmoil and upheaval over the next 5 years. What? Who knows.
The key here is that oil equities have a high beta to dollar debasement given the operating leverage in their structure. You have a truly real asset in oil. If you're playing for continued dollar debasement, and you see a reckoning happening there, then oil exposed equities offer you a levered bet on that outcome.
What Doomberg is saying about Peak Oil is clearly correct - it's a fallacy (at least in our lifetimes). They always find new sources and new efficiencies. He is also very careful to take down the Peak Cheap Oil idea too - when your denominator is gold.
What I think perhaps Doomberg isn't talking about is that squishy part in the middle. If the US is no longer the marginal source of new supply then US exceptionalism has a problem - even if the problem is only short to medium term, it's a large scale problem.
This whole series has been great, thank you!
A few threads that link them all.
I think it's easy to read into what Doomberg says and for it to feel bearish. Who knows if G&R and HFI are right on US shale rolling over - but it's an interesting hypothesis, and one that will indeed be proven one way or the other in 2025/ 2026 (exciting times).
The importance of this hypothesis is critical to geopolitics. Oil is fungible (meaning that it does the same thing whether we buy it from Texas or Saudi Arabia - ignoring crude grades), but the location matters immensely! I stand by the idea that US exceptionalism has been partially driven by US energy exceptionalism driven by the shale patch. Economic activity is energy transformed - and no other nation has ever achieved what the US has done in harnessing the power of energy.
If that is going away - meaning the US is no longer the marginal producer of barrels, then we have a see change in the global order coming.
The common thread between Crude Chronicles and Doomberg is gold. I strongly agree with Doomberg that gold is the true medium of exchange, or at least the true equalizer or leveler in terms of prices and value.
What Crude Chronicles is saying is that preceding every major oil shock has been some sort of debasement of the dollar. He doesn't say what that is going to be, just that it's due. I'm a believer in cycles and all the cyclical folks are pointing to deep turmoil and upheaval over the next 5 years. What? Who knows.
The key here is that oil equities have a high beta to dollar debasement given the operating leverage in their structure. You have a truly real asset in oil. If you're playing for continued dollar debasement, and you see a reckoning happening there, then oil exposed equities offer you a levered bet on that outcome.
What Doomberg is saying about Peak Oil is clearly correct - it's a fallacy (at least in our lifetimes). They always find new sources and new efficiencies. He is also very careful to take down the Peak Cheap Oil idea too - when your denominator is gold.
What I think perhaps Doomberg isn't talking about is that squishy part in the middle. If the US is no longer the marginal source of new supply then US exceptionalism has a problem - even if the problem is only short to medium term, it's a large scale problem.
Ben, I really enjoyed this interview. Doomberg brought up several contrarian points that I thought of during your first 2 energy podcasts
Doomberg mentioned an entire site dedicated to slamming his view on oil, and that person had recently changed their minds.
Who is he talking about?
I believe it was Art Berman, but don't quote me on it.
Thank you!
Typical ‘bear’ case by the chicken lol. Some points are valid, but don’t go all-in on his gross generalisations.