Geopolitical noise masks long-term oil cheapness
The guest argued that while oil is vulnerable to a short-term pullback as geopolitical hype fades, it remains structurally cheap and poised for a long-term run toward $200.
The argument
He asserted that the run-up driven by the Iran conflict attracted short-term traders who are likely to get flushed out, potentially driving prices into the $80s. However, on a multi-year basis, oil is extremely cheap relative to the S&P 500 and historical peaks, making any sharp pullback a long-term buying opportunity.
The thesis, stress-tested
✓ What validates it
- ✓WTI crude falling into the $80s to flush out short-term traders
- ✓Oil subsequently breaking out past the $130-$140 resistance levels on structural flows
▸ Risks discussed
- ▸Short-term downside momentum flushing out positions down to the low $80s
- ▸A global economic slowdown dampening structural demand for crude
Hear it yourself
"It didn't work. K? And now we're where? Right about in the smack in the middle of that up down stuff. Now if you look at a price chart of silver and gold, you say, well, I'll I'll be a believer if it goes back and makes a new high. K? Like, a 120 plus silver and gold, 5,600. Okay. But if you look more closely at the price action, especially on silver, you'll notice that all the rallies since that January, February collapse peaked just above 90. There's, like, four different rallies that probe got there, and there were sellers, sellers, sellers, sellers."
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