Energy Thesis: The guests argue the US Energy sector is poised for outperformance amid persistent supply-demand imbalances and underinvestment.
Oil Market Tightness: Ongoing SPR drawdowns, Cushing storage nearing operational limits, and surging exports signal an Oil Supply Crunch despite price weakness.
Refining Dynamics: US refiners are optimizing for jet fuel, leaving gasoline inventories at multi-year lows ahead of summer, elevating risks of gasoline shortages.
Natural Gas & LNG: Forecasts show record Natural Gas Demand growth, with LNG Export Growth the largest driver and potential curtailments for weaker-contract customers.
Data Centers: Massive new Data Centers (e.g., a proposed 9 GW build) will strain power and gas infrastructure, likely lifting utility costs and reprioritizing supply to large buyers.
Geopolitics: China reducing Treasuries while accumulating commodities (oil, gold) could exacerbate US energy vulnerabilities and market volatility.
Risks & Policy: Political interventions, export bans, or nationalization would be disruptive tail risks; however, a regime shift favoring energy equities is expected before heavy-handed policies arrive.
Transcript
Nothing in this program should be considered investment advice. It is for educational purposes only. Please hit pause and read this disclaimer in full. You keep seeing these charts of China treasuries are continuing to reduce. And [music] I've been looking at Chinese inventories. I've not looked at it in the past week, but they've not they've not hit their strategic reserves where we're drawing ours down. So if I'm them, this is a brilliant opportunity to to protect my stockpile, sell these treasuries, buy these oil that appears to be artificially lower in price and pull them over here to let your what is it? Sun Tzu? [music] I can't I don't know all of the sayings, but don't interrupt your enemy when they're doing something foolish. Welcome everyone to this episode of Finance You. I am your host Chris Martenson back here again with Paul Ceyker of Ceyker Wealth Management. Paul, good to see you back this week. Good to see you again as well, Chris. Paul, you know what I want to talk about? Oil and gas prices. They're insane. Absolutely insane. So here's a little context. So just a couple days ago on Monday cuz we're recording this on Wednesday, May 20th. So WTI crude which is just just seems to go down really fights its way back up, but then all of a sudden Trump comes out and releases this tweet that says, "Oh, I've decided to hold off on the attacks that were planned for tomorrow which was Tuesday and I talked with the leaders of three countries and I'm respecting their wishes." And he named them, right? Mohammed bin Salman from Saudi Arabia and a couple others. Blah blah blah blah blah blah. Turned out none of it was true, right? The all the three of those leaders came out to the Wall Street Journal and said we don't know what he's talking about. We didn't There was there was an attack planned? We were consulted? So but this has been a familiar pattern. Trump tweets something and it turns out not to be true or it's denied. Iran's denying it. In this case, Gulf leaders are denying it. So, today, May 20th, here we go again. Trump tweets out, says US is in final stages of talks with Iran. So, the 10-year yield falls 10 basis points. Yay! Oil gets absolutely smashed again below $100 here in the US. Now, I've been on this, Paul, because supply and demand are a thing and price is the settling mechanism between those two points. So, guess what? When you hold prices down, when you tweet smash prices of oil down, you know what happens? You sell more of it. Uh surprise, right? [laughter] US oil exports second biggest on record this last week. The biggest on record was the week prior. So, we're exporting this oil. This is oil we don't have. This all this oil above this line of about four four million barrels a day. Everything above this is coming out of our inventories, our strategic petroleum reserve and commercial inventories. Look at this. Most recent record, this is biggest weekly drain on record for the strategic petroleum reserve. We're selling it to the world. Selling it to the world. And now here's here's where we're just through the looking glass. Orwell's spinning in his grave. This is truly insane. Let's try and make sense of this headline together. Oil prices extend decline after the largest crude inventory draw down in history. And Cushing, Oklahoma's tank bottoms loom. We're only about 5 million barrels away from just being out at Cushing at this point, which is our largest commercial repository. Oil prices extend decline after the largest crude inventory draw down in history. So much for supply and demand. Have I ever encountered headlines like this? So, something is completely fake about this. This something is so fake about this. And by the way, you'll be surprised to learn somebody put a huge bet on oil prices going down just the day before. Huge bets. >> [laughter] >> Hey, let's get around. Hey guys, I'm going to tweet tomorrow. So, get your get your trades in. Hey, and that headline, somebody at Zero Hedge has been following the Babylon Bee. Because that's that's a headline that I would see on the Babylon Bee. And for those of you that aren't familiar, it's all sarcasm. It is absolutely hilarious and shockingly true sometimes. So, that that's so much for supply and demand, right? It's just it just doesn't I mean So, here's the prediction. You know what we're going to do is we're going to continue to hold prices down because that's politically what needs to happen. Fine. But then what's going to eventually someday like it we run out or we get too low and we get scared and all of a sudden that's when they just slam the lid on the whole thing. Oil prices shoot to the roof or if they don't, we have we're running into actual supply issues. So, couple of anecdotes here. One, I had a gentleman drive out from Boston. We worked in the garden together, a peak follower. Great guy, good time. Thanks for coming out, Chris. But he said when I was in Springfield, they had one of those roadside signs lit up that said no diesel for 60 miles. Ooh. >> So, the the next two service areas on on Route 90 out just out. And that's going to further as they keep moving that sign back, it's going to continue to get consumed more and more. 60 miles. How do How do you not have 60 miles of diesel on This is Route 90, right? This is an This is an Interstate highway system. Crazy, right? >> This is not South Dakota where it's 120 miles to the next gas station. You've got all kinds of gas stations along the way. Wow. Yeah. Isn't that I mean, and like just it's just a roadside. Nobody's making anything about it, right? And then and then the International Energy Agency chief, you know, comes out and he's warning about commercial oil oil inventories depleting rapidly, only weeks left. This this is the kind of headline that we weren't even close to this level in 2022 when oil effortlessly went up to 120 a barrel, bounced there for several months, and then finally I realized, "Oh, it wasn't that big of a deal. It was sort of resolved what's happening with the whole Russia situation." This is an order of magnitude worse than that, and somehow oil gets smashed cuz Trump tweets something. We're almost every day this is happening now. So, a lot of oil traders have decided that there's something afoot in these markets. They're not free, they're not fair, there's an invisible hand. But, it's insane, Paul, because whether whether you agree with politically makes sense to do this or geopolitically the point is that when you hold the price down too low, you get too much demand relative to supply. And dwindling oil inventories tell us that we have too much demand relative to supply. There's only Well, there's two ways to deal with this. One, go full communist and just, you know, limit people how much they can buy. Hey, Paul, good news. Diesel's only $5 a gallon. Bad news, you're only allowed to buy it once a month on a Tuesday after 4:00 if there's any, right? You know >> Welcome to your forced 15-minute city, right? You can't travel outside of 15 minutes, so Exactly. Way number two, which is the time-honored way, is you let price be the settling mechanism, and the price rises until demand enough demand is destroyed that, you know, it meets supply. And that's honestly the right way to do it, cuz you know there are flights that aren't necessary for people to take. There are shipments of super low value goods that don't necessarily have to happen in for our society to function, you know. And those are the things that get trimmed off first, right? You know. We're not doing that. We're We're going We're going to continue to allow supply to be exceeded by demand until we run into trouble. That's going to That's really going to be Ooh, that's going to be painful. It's going to be painful. Chris, do you know where all of these exports are going? Is a lot of it ending up in in Asia and China? Is that where a lot of these are going? Do you have any data on that? We do. So, last week 7 million barrels total got got contracted for shipped out and that went all to Asia. Um and prior to that we had a load that went to Pakistan. Some of bunch is going to Europe. Um so, right now our refiners refineries are busy They You can tune your output a little bit. Like, you can't just say I want this barrel of oil to become 100% diesel or jet fuel. But, you could take the percentages and get You get a slightly higher cut of something and so they've they've tuned it to get a much higher cut of jet fuel cuz they need that very badly in Europe. So, but because of that you get a little bit less gasoline and diesel which are on the other side of that cut. Um so, so, you know, you get a little more of this but a little less of that. So, right now the gasoline inventories in the United States have never been lower at this time of the year. And what do we have coming up? Memorial Day, we're kicking off the summer driving season. This is typically when gasoline demand peaks to its highest for June, July, August, right? Maybe even more so now that um people like me no longer like flying. I hate it and I'm not going to Europe. So, you know, uh I think more people are going to be taking driving vacations than you know, flying vacations. So, so we could see we could get run into see real gas problems and of course we know it's a serious problem cuz Chris Wright, the energy secretary, came out yesterday and said, "We're not going to run out of gasoline." Which made a lot of people worry we're about to run out of gasoline. >> [laughter] >> Very good reaction to that statement. You know, but I keep thinking you you keep seeing these charts of China treasuries are continuing to reduce. Um and I've been looking at Chinese inventories. I've not looked at it in the past week, but they've not they've not hit their strategic reserves where we're drawing ours down. So, if I'm them, this is a brilliant opportunity to to protect my stockpile, sell these treasuries, buy these oil that appears to be artificially lower in price, and pull them over here to let your What is it? Sun Tzu? I can't I don't know all of the sayings, but don't interrupt your enemy when they're doing something foolish. That's the summary kind of what it is. Chris will remember. Y'all, can you remember exactly what it is, Chris? I'm going to be surprised if you don't. Never interrupt an enemy who's in the process of making a mistake. Bingo. Somebody was teasing me the other day, I need to put quotes everywhere. I said, "Why do I need to do that? Chris always remembers. I just need to get close." So, but you know, if I'm them, I'm going to strip away, let us make a mistake in getting our inventories low, and then when I absolutely have to, I've maximized the liquidation of my treasuries. But maybe part of that's why it's going up. I don't have to recycle back in, let rates go up cuz they've recycled them back into our treasuries. And then you can call, you know, facilitate an economic calamity within the United States. And if it's bad enough, now I've got all these reserves over here that I'll start using to protect our citizenry. Like it's just brilliant on their part. They're thinking long term, assuming that's what they're doing. They're thinking long term, but we're incentivizing that, right? I mean, you see the statistics on the silver that's gone over to China and to India and and and the other places. And what was it a year ago we talked about maybe where the Indian banking system had allowed extra leverage uh uh on silver backing, which was like 10 to 1 within certain parameters in relation to gold. >> [gasps] >> And I think we talked about at the time what that's doing is incentivizing stripping those metals out of the west over to the east. And what our actions are doing is incentivizing stripping our reserves and our emergency fund as a nation over there while they're preserving theirs. Top top three exports, top top last three months top exports gold. It's our top export. And we're exporting a lot of oil, but we're exporting more gold. Where is it going? China. Guaranteed. Guaranteed. But unobtainium to come back. Oh, yeah. No, that that's a one-way trip for sure. Um So so on the one hand we got Trump tweeting, which just somehow magically corresponds with all these oil slams. I have my suspicions about how that the mechanism behind that. But on the other hand, right? We have the IEA chief, Fatih Birol, who I just I I put up here, right? You've got Jeff Currie, the the legendary commodities investor out of Carlyle Group, saying the same thing. Like this is kind of He's out there saying flat out, we could hit tank bottoms by July 4th, you know, tank bottoms. That that means you have you've hit operational insufficiency and the refineries just shut down. And now you're in a true crisis that's almost unimaginable to anybody listening, including me. Um and you've got um Oh, oh, Daniel Yergin, the oil guru, was just on CNBC yesterday saying, uh this looks really bad. So you have all these experts, CEOs of oil companies, top commodity analysts, every major commodities analyst house, all saying the same thing. This is bad. It's heading to worse. And if it gets to worse, this is a real existential moment. Like this could be really bad. Mhm. And somehow all that happens in our markets, day after day, are these slams. just slams. Slam, look at that. 4 and 1/2 4.75% at the time I took this snapshot at 11 whatever this morning. It's just It's relentless. Sell oil. Sell oil. And we are selling oil. It's going to the rest of the world. And we're draining our We're eating our seed corn. This is like a trust fund kid comes up to you and says, "Good news, my my parents left me a tasty trust fund. I'm going to live off it forever." And you take a peek and you find out they've been eating into the principal balance every month on a heavy basis. You're like, "I have some bad news, kid, you know?" Yeah, you're in trouble. You're in trouble. Yeah, you don't need to be going buying all these depreciating assets just to make yourself look good in front of people that you don't necessarily like, right? Markets [music] are facing heightened uncertainty, and thoughtful portfolio management has never been [music] more important. If your current strategy relies solely on passive investing [music] or diversification without active oversight, it may be time to consider a different approach. At Peak Financial [music] Investing, we connect you with experienced wealth managers who actively manage [music] portfolios using disciplined, research-driven strategies designed to adapt to evolving market conditions. Our focus [music] is on helping clients navigate volatility with clarity and confidence. While no investment strategy [music] can guarantee results or eliminate risk, we believe that preparation and active management can make a meaningful difference over time. Visit peakfinancialinvesting.com [music] to schedule a complimentary consultation and explore whether our approach aligns with your goals. I'm Dr. Chris Martenson, and I am proud [music] to support Peak Financial Investing. This is not a guarantee of future performance, but a call to take your financial planning seriously. Again, that's peakfinancialinvesting.com. [music] Investing, of course, involves risk, including the potential loss of principle. [music] Past performance is not indicative of future results. Please consult with a qualified advisor before making investment decisions. While you're gone last week, I also put out this big piece. Uh you know, it was it was kicked off by watching this astonishing interview between Tucker Carlson and Kevin O'Leary, the Shark Tank guy. Wore the baseball hat, you know, in a suit. Um in his usual inimical self. Talking about this massive data center that they're going to be building in Utah. Like 9 gigawatts. It's going to It's going to potentially raise nighttime temperatures by like 26° F cuz of all the waste heat from I call them giant toasters, right? They're toasters that don't make toast. That's what a data center is, you know? [laughter] We feed all this energy in and it makes waste heat and that has to go somewhere cuz that's a law of nature. And so it basically gets dumped into the environment. It's a There could be that, but it was the power. Where's all this power going to come from? He's like, "Oh, we're going to use There's this natural gas pipeline, the Ruby pipeline. It's only 17% utilized. We'll just We'll just use that." In a typical sort of Wall Street, Silicon Valley like shrug, "Oh, the minions will figure that out. I've decided that we need this power. It'll come from somewhere." They like no grounding in reality. So, I added the numbers up and I'm like, "Where's all this Where's Is anybody mathing the math on natural gas?" And so this just came out on on Jack Prendelli's uh status uh X status this morning. US gas demand growth by sector. These are 5-year increments in here. 2007 to 13, 13 to 19, 19 to 25. And now we're looking at 2025 to 2031. This is going to be the forecast. Obviously, we haven't made it 2031 yet. But this is going to be the the highest growth in gas demand in any 5-year period in history. And it's going to be 27 billion cubic feet per day. Almost the biggest chunk in red, LNG feed gas for making liquefied natural gas. Power is just going to be sucking up another 5 6 BCF. Yeah, you got this uh industrial here in blue, green, Mexico exports. They're going to need a little more. Um Canada exports. Um kind of weird, Canada's usually a a net positive. But at any rate, um massive. Where is all that going to come from? Where Where is all that the largest projected You know where it's going to come from, Paul? I can tell you exactly where it's going to come from. It is going to come from um the customers out there who have the least viable contracted arrangements are going to find themselves in curtailment in moments of need. Now, I picked up some of that language from this amazing comment that somebody just put on on Twitter. Great immediate follow for this guy. He's like, "Dude, he talked exactly." He said He said, "Here's what happens." It's a very complicated market. There are all these different contracts that are out there, right? So, different people have different contracts. And the people who have the least contractual teeth or claim get cut off first. It's almost always residential. Those people are at the weakest end of this thing. Yeah. >> So, They have curtailment just means viciously higher prices, right? For residential. Or no access at all. What was it I read a report and or or saw an expose that apparently there was some Nevada company that was supplying power over the state line into California, which is going to be potentially redirected or or no contract because of the data center that's potentially coming up. So, it's like, "Forget you, people. We're going after the biggest pockets and and we're going to go to them cuz then we can deal with one customer instead of 20." Like, that's the it's the Walmart model that just absolutely destroyed mom-and-pop businesses and small communities across the nation, but in our energy capabilities. I mean, >> Yeah. horrible. It It just looks to me like we're a little short on people at that sort of Kevin O'Leary level a little short on people there who've actually swung a hammer, you know, dug a ditch, like played with gravity or been out in reality. This is just the energy reality. The number the amount of energy ignorance out there is astonishing to me. Including to the president who just couple weeks ago we talked about this. He's like, "Oh, we're going to double our oil output next year." I'm like, "What?" >> [laughter] >> No, we're not. That's not Nope, not happening, right? So, just astonishing that you can have that energy ignorance at all levels. It's profound. It's It's going to >> [snorts] >> Now, again, there's opportunity. I want people to be aware like your utility costs are going up. Sorry, they just are, right? Electricity's already been going up for a lot of reasons. Data center costs being one, but um other reasons like we forgot to invest in our electrical grid for a couple decades. Oops. But, um but on the other side of that, it's pretty clear to me what the investment thesis is around this, which means the energy sector, particularly in the United States, I think is going to be doing particularly well uh for a a good long time going forward. Um and that's just the math of it. Barring something crazy like they nationalize our oil and gas industry or or forbid exports and force companies to sell at some prevailing rate the government has set, not what the market would set, you know. Those could be disastrous. But, that's how you wreck a country and you wreck an industry and you wreck the bottom layer of prosperity. And if we do that, uh what do you think about Costa Rica? No, I love Costa Rica, by the way. >> [laughter] >> I do. I wish my wife liked it as much as I do, but I love Costa Rica. But, yeah, I mean I I I mean that's dancing around the edges, but essentially it's full-on communism is what it is and controlling no free markets and and mass misery for all. Yeah. Yep. So, that's the energy story. Um obviously we'll we'll keep tracking that as time goes on, but um ooh, what a story developing there. It's amazing. It really is and that's like one of the reasons why we had we had developed us but took a little longer than I wanted to. >> [sighs] >> But building an energy stock strategy to participate in an obvious long-term trend that's adaptable enough to shift as that, you know, rolls through the system till we catch back up. And you know, it's one of those things where you just have to look at it and say, "Look, we need some exposure to this from a long-term standpoint." Carry a little bit more risk, a small percentage of portfolio can make a dramatic outcome. Uh make a huge impact on your your inflation protection from that standpoint it it assuming that the weight of the evidence seems to be clear. Probably going to take longer than we think or maybe quicker, who knows how it is, but the weight of the evidence is there and you just have to have exposure to it. You look at the cap weighting of the S&P 500, I mean, energy and anything from that standpoint is just minimal a percentage of the S&P allocation and I think we're going to see a massive regime shift going forward unless there's just absolute communistic type control uh within there. And uh but there's going to be plenty of gains there before that heavy hand steps in. Uh so, I still see huge opportunity in that space. Good. All right. Well, with that Paul, we are uh done for today. So, if anybody out there listening wants to talk to Paul or his amazing team, please go to peakfinancialinvesting.com, fill out a simple form, few questions in there, and some disclosures, and uh click send or submit, and then somebody from Paul's office will be in touch with you within 48 business hours to schedule what will be the first of three calls. You get a hey, an introductory call, then a planning call, and then finally if you get there a recommendations call, and if all of that sort of sorts itself out and it makes sense to work together, then you could go down that part of the road with Paul. Everybody who's gone down that process though, independent of whether or not they end up working with Paul and his team, says it's been a highly valuable process. So, I would encourage you to take advantage of that today while you can. I mean, there's no obligation. I hope you guys can tell we're not high pressure. If if we can help you, and all that is is the plan, then everything else will take care of itself. Well, thank you for doing that, Paul, and thanks for your time again today. You're welcome. Good to see you, Chris. All right. Bye, everybody. We'll be back next week with another episode of Finance You.
China Watches America Pawn The Furniture?
Summary
Transcript
Nothing in this program should be considered investment advice. It is for educational purposes only. Please hit pause and read this disclaimer in full. You keep seeing these charts of China treasuries are continuing to reduce. And [music] I've been looking at Chinese inventories. I've not looked at it in the past week, but they've not they've not hit their strategic reserves where we're drawing ours down. So if I'm them, this is a brilliant opportunity to to protect my stockpile, sell these treasuries, buy these oil that appears to be artificially lower in price and pull them over here to let your what is it? Sun Tzu? [music] I can't I don't know all of the sayings, but don't interrupt your enemy when they're doing something foolish. Welcome everyone to this episode of Finance You. I am your host Chris Martenson back here again with Paul Ceyker of Ceyker Wealth Management. Paul, good to see you back this week. Good to see you again as well, Chris. Paul, you know what I want to talk about? Oil and gas prices. They're insane. Absolutely insane. So here's a little context. So just a couple days ago on Monday cuz we're recording this on Wednesday, May 20th. So WTI crude which is just just seems to go down really fights its way back up, but then all of a sudden Trump comes out and releases this tweet that says, "Oh, I've decided to hold off on the attacks that were planned for tomorrow which was Tuesday and I talked with the leaders of three countries and I'm respecting their wishes." And he named them, right? Mohammed bin Salman from Saudi Arabia and a couple others. Blah blah blah blah blah blah. Turned out none of it was true, right? The all the three of those leaders came out to the Wall Street Journal and said we don't know what he's talking about. We didn't There was there was an attack planned? We were consulted? So but this has been a familiar pattern. Trump tweets something and it turns out not to be true or it's denied. Iran's denying it. In this case, Gulf leaders are denying it. So, today, May 20th, here we go again. Trump tweets out, says US is in final stages of talks with Iran. So, the 10-year yield falls 10 basis points. Yay! Oil gets absolutely smashed again below $100 here in the US. Now, I've been on this, Paul, because supply and demand are a thing and price is the settling mechanism between those two points. So, guess what? When you hold prices down, when you tweet smash prices of oil down, you know what happens? You sell more of it. Uh surprise, right? [laughter] US oil exports second biggest on record this last week. The biggest on record was the week prior. So, we're exporting this oil. This is oil we don't have. This all this oil above this line of about four four million barrels a day. Everything above this is coming out of our inventories, our strategic petroleum reserve and commercial inventories. Look at this. Most recent record, this is biggest weekly drain on record for the strategic petroleum reserve. We're selling it to the world. Selling it to the world. And now here's here's where we're just through the looking glass. Orwell's spinning in his grave. This is truly insane. Let's try and make sense of this headline together. Oil prices extend decline after the largest crude inventory draw down in history. And Cushing, Oklahoma's tank bottoms loom. We're only about 5 million barrels away from just being out at Cushing at this point, which is our largest commercial repository. Oil prices extend decline after the largest crude inventory draw down in history. So much for supply and demand. Have I ever encountered headlines like this? So, something is completely fake about this. This something is so fake about this. And by the way, you'll be surprised to learn somebody put a huge bet on oil prices going down just the day before. Huge bets. >> [laughter] >> Hey, let's get around. Hey guys, I'm going to tweet tomorrow. So, get your get your trades in. Hey, and that headline, somebody at Zero Hedge has been following the Babylon Bee. Because that's that's a headline that I would see on the Babylon Bee. And for those of you that aren't familiar, it's all sarcasm. It is absolutely hilarious and shockingly true sometimes. So, that that's so much for supply and demand, right? It's just it just doesn't I mean So, here's the prediction. You know what we're going to do is we're going to continue to hold prices down because that's politically what needs to happen. Fine. But then what's going to eventually someday like it we run out or we get too low and we get scared and all of a sudden that's when they just slam the lid on the whole thing. Oil prices shoot to the roof or if they don't, we have we're running into actual supply issues. So, couple of anecdotes here. One, I had a gentleman drive out from Boston. We worked in the garden together, a peak follower. Great guy, good time. Thanks for coming out, Chris. But he said when I was in Springfield, they had one of those roadside signs lit up that said no diesel for 60 miles. Ooh. >> So, the the next two service areas on on Route 90 out just out. And that's going to further as they keep moving that sign back, it's going to continue to get consumed more and more. 60 miles. How do How do you not have 60 miles of diesel on This is Route 90, right? This is an This is an Interstate highway system. Crazy, right? >> This is not South Dakota where it's 120 miles to the next gas station. You've got all kinds of gas stations along the way. Wow. Yeah. Isn't that I mean, and like just it's just a roadside. Nobody's making anything about it, right? And then and then the International Energy Agency chief, you know, comes out and he's warning about commercial oil oil inventories depleting rapidly, only weeks left. This this is the kind of headline that we weren't even close to this level in 2022 when oil effortlessly went up to 120 a barrel, bounced there for several months, and then finally I realized, "Oh, it wasn't that big of a deal. It was sort of resolved what's happening with the whole Russia situation." This is an order of magnitude worse than that, and somehow oil gets smashed cuz Trump tweets something. We're almost every day this is happening now. So, a lot of oil traders have decided that there's something afoot in these markets. They're not free, they're not fair, there's an invisible hand. But, it's insane, Paul, because whether whether you agree with politically makes sense to do this or geopolitically the point is that when you hold the price down too low, you get too much demand relative to supply. And dwindling oil inventories tell us that we have too much demand relative to supply. There's only Well, there's two ways to deal with this. One, go full communist and just, you know, limit people how much they can buy. Hey, Paul, good news. Diesel's only $5 a gallon. Bad news, you're only allowed to buy it once a month on a Tuesday after 4:00 if there's any, right? You know >> Welcome to your forced 15-minute city, right? You can't travel outside of 15 minutes, so Exactly. Way number two, which is the time-honored way, is you let price be the settling mechanism, and the price rises until demand enough demand is destroyed that, you know, it meets supply. And that's honestly the right way to do it, cuz you know there are flights that aren't necessary for people to take. There are shipments of super low value goods that don't necessarily have to happen in for our society to function, you know. And those are the things that get trimmed off first, right? You know. We're not doing that. We're We're going We're going to continue to allow supply to be exceeded by demand until we run into trouble. That's going to That's really going to be Ooh, that's going to be painful. It's going to be painful. Chris, do you know where all of these exports are going? Is a lot of it ending up in in Asia and China? Is that where a lot of these are going? Do you have any data on that? We do. So, last week 7 million barrels total got got contracted for shipped out and that went all to Asia. Um and prior to that we had a load that went to Pakistan. Some of bunch is going to Europe. Um so, right now our refiners refineries are busy They You can tune your output a little bit. Like, you can't just say I want this barrel of oil to become 100% diesel or jet fuel. But, you could take the percentages and get You get a slightly higher cut of something and so they've they've tuned it to get a much higher cut of jet fuel cuz they need that very badly in Europe. So, but because of that you get a little bit less gasoline and diesel which are on the other side of that cut. Um so, so, you know, you get a little more of this but a little less of that. So, right now the gasoline inventories in the United States have never been lower at this time of the year. And what do we have coming up? Memorial Day, we're kicking off the summer driving season. This is typically when gasoline demand peaks to its highest for June, July, August, right? Maybe even more so now that um people like me no longer like flying. I hate it and I'm not going to Europe. So, you know, uh I think more people are going to be taking driving vacations than you know, flying vacations. So, so we could see we could get run into see real gas problems and of course we know it's a serious problem cuz Chris Wright, the energy secretary, came out yesterday and said, "We're not going to run out of gasoline." Which made a lot of people worry we're about to run out of gasoline. >> [laughter] >> Very good reaction to that statement. You know, but I keep thinking you you keep seeing these charts of China treasuries are continuing to reduce. Um and I've been looking at Chinese inventories. I've not looked at it in the past week, but they've not they've not hit their strategic reserves where we're drawing ours down. So, if I'm them, this is a brilliant opportunity to to protect my stockpile, sell these treasuries, buy these oil that appears to be artificially lower in price, and pull them over here to let your What is it? Sun Tzu? I can't I don't know all of the sayings, but don't interrupt your enemy when they're doing something foolish. That's the summary kind of what it is. Chris will remember. Y'all, can you remember exactly what it is, Chris? I'm going to be surprised if you don't. Never interrupt an enemy who's in the process of making a mistake. Bingo. Somebody was teasing me the other day, I need to put quotes everywhere. I said, "Why do I need to do that? Chris always remembers. I just need to get close." So, but you know, if I'm them, I'm going to strip away, let us make a mistake in getting our inventories low, and then when I absolutely have to, I've maximized the liquidation of my treasuries. But maybe part of that's why it's going up. I don't have to recycle back in, let rates go up cuz they've recycled them back into our treasuries. And then you can call, you know, facilitate an economic calamity within the United States. And if it's bad enough, now I've got all these reserves over here that I'll start using to protect our citizenry. Like it's just brilliant on their part. They're thinking long term, assuming that's what they're doing. They're thinking long term, but we're incentivizing that, right? I mean, you see the statistics on the silver that's gone over to China and to India and and and the other places. And what was it a year ago we talked about maybe where the Indian banking system had allowed extra leverage uh uh on silver backing, which was like 10 to 1 within certain parameters in relation to gold. >> [gasps] >> And I think we talked about at the time what that's doing is incentivizing stripping those metals out of the west over to the east. And what our actions are doing is incentivizing stripping our reserves and our emergency fund as a nation over there while they're preserving theirs. Top top three exports, top top last three months top exports gold. It's our top export. And we're exporting a lot of oil, but we're exporting more gold. Where is it going? China. Guaranteed. Guaranteed. But unobtainium to come back. Oh, yeah. No, that that's a one-way trip for sure. Um So so on the one hand we got Trump tweeting, which just somehow magically corresponds with all these oil slams. I have my suspicions about how that the mechanism behind that. But on the other hand, right? We have the IEA chief, Fatih Birol, who I just I I put up here, right? You've got Jeff Currie, the the legendary commodities investor out of Carlyle Group, saying the same thing. Like this is kind of He's out there saying flat out, we could hit tank bottoms by July 4th, you know, tank bottoms. That that means you have you've hit operational insufficiency and the refineries just shut down. And now you're in a true crisis that's almost unimaginable to anybody listening, including me. Um and you've got um Oh, oh, Daniel Yergin, the oil guru, was just on CNBC yesterday saying, uh this looks really bad. So you have all these experts, CEOs of oil companies, top commodity analysts, every major commodities analyst house, all saying the same thing. This is bad. It's heading to worse. And if it gets to worse, this is a real existential moment. Like this could be really bad. Mhm. And somehow all that happens in our markets, day after day, are these slams. just slams. Slam, look at that. 4 and 1/2 4.75% at the time I took this snapshot at 11 whatever this morning. It's just It's relentless. Sell oil. Sell oil. And we are selling oil. It's going to the rest of the world. And we're draining our We're eating our seed corn. This is like a trust fund kid comes up to you and says, "Good news, my my parents left me a tasty trust fund. I'm going to live off it forever." And you take a peek and you find out they've been eating into the principal balance every month on a heavy basis. You're like, "I have some bad news, kid, you know?" Yeah, you're in trouble. You're in trouble. Yeah, you don't need to be going buying all these depreciating assets just to make yourself look good in front of people that you don't necessarily like, right? Markets [music] are facing heightened uncertainty, and thoughtful portfolio management has never been [music] more important. If your current strategy relies solely on passive investing [music] or diversification without active oversight, it may be time to consider a different approach. At Peak Financial [music] Investing, we connect you with experienced wealth managers who actively manage [music] portfolios using disciplined, research-driven strategies designed to adapt to evolving market conditions. Our focus [music] is on helping clients navigate volatility with clarity and confidence. While no investment strategy [music] can guarantee results or eliminate risk, we believe that preparation and active management can make a meaningful difference over time. Visit peakfinancialinvesting.com [music] to schedule a complimentary consultation and explore whether our approach aligns with your goals. I'm Dr. Chris Martenson, and I am proud [music] to support Peak Financial Investing. This is not a guarantee of future performance, but a call to take your financial planning seriously. Again, that's peakfinancialinvesting.com. [music] Investing, of course, involves risk, including the potential loss of principle. [music] Past performance is not indicative of future results. Please consult with a qualified advisor before making investment decisions. While you're gone last week, I also put out this big piece. Uh you know, it was it was kicked off by watching this astonishing interview between Tucker Carlson and Kevin O'Leary, the Shark Tank guy. Wore the baseball hat, you know, in a suit. Um in his usual inimical self. Talking about this massive data center that they're going to be building in Utah. Like 9 gigawatts. It's going to It's going to potentially raise nighttime temperatures by like 26° F cuz of all the waste heat from I call them giant toasters, right? They're toasters that don't make toast. That's what a data center is, you know? [laughter] We feed all this energy in and it makes waste heat and that has to go somewhere cuz that's a law of nature. And so it basically gets dumped into the environment. It's a There could be that, but it was the power. Where's all this power going to come from? He's like, "Oh, we're going to use There's this natural gas pipeline, the Ruby pipeline. It's only 17% utilized. We'll just We'll just use that." In a typical sort of Wall Street, Silicon Valley like shrug, "Oh, the minions will figure that out. I've decided that we need this power. It'll come from somewhere." They like no grounding in reality. So, I added the numbers up and I'm like, "Where's all this Where's Is anybody mathing the math on natural gas?" And so this just came out on on Jack Prendelli's uh status uh X status this morning. US gas demand growth by sector. These are 5-year increments in here. 2007 to 13, 13 to 19, 19 to 25. And now we're looking at 2025 to 2031. This is going to be the forecast. Obviously, we haven't made it 2031 yet. But this is going to be the the highest growth in gas demand in any 5-year period in history. And it's going to be 27 billion cubic feet per day. Almost the biggest chunk in red, LNG feed gas for making liquefied natural gas. Power is just going to be sucking up another 5 6 BCF. Yeah, you got this uh industrial here in blue, green, Mexico exports. They're going to need a little more. Um Canada exports. Um kind of weird, Canada's usually a a net positive. But at any rate, um massive. Where is all that going to come from? Where Where is all that the largest projected You know where it's going to come from, Paul? I can tell you exactly where it's going to come from. It is going to come from um the customers out there who have the least viable contracted arrangements are going to find themselves in curtailment in moments of need. Now, I picked up some of that language from this amazing comment that somebody just put on on Twitter. Great immediate follow for this guy. He's like, "Dude, he talked exactly." He said He said, "Here's what happens." It's a very complicated market. There are all these different contracts that are out there, right? So, different people have different contracts. And the people who have the least contractual teeth or claim get cut off first. It's almost always residential. Those people are at the weakest end of this thing. Yeah. >> So, They have curtailment just means viciously higher prices, right? For residential. Or no access at all. What was it I read a report and or or saw an expose that apparently there was some Nevada company that was supplying power over the state line into California, which is going to be potentially redirected or or no contract because of the data center that's potentially coming up. So, it's like, "Forget you, people. We're going after the biggest pockets and and we're going to go to them cuz then we can deal with one customer instead of 20." Like, that's the it's the Walmart model that just absolutely destroyed mom-and-pop businesses and small communities across the nation, but in our energy capabilities. I mean, >> Yeah. horrible. It It just looks to me like we're a little short on people at that sort of Kevin O'Leary level a little short on people there who've actually swung a hammer, you know, dug a ditch, like played with gravity or been out in reality. This is just the energy reality. The number the amount of energy ignorance out there is astonishing to me. Including to the president who just couple weeks ago we talked about this. He's like, "Oh, we're going to double our oil output next year." I'm like, "What?" >> [laughter] >> No, we're not. That's not Nope, not happening, right? So, just astonishing that you can have that energy ignorance at all levels. It's profound. It's It's going to >> [snorts] >> Now, again, there's opportunity. I want people to be aware like your utility costs are going up. Sorry, they just are, right? Electricity's already been going up for a lot of reasons. Data center costs being one, but um other reasons like we forgot to invest in our electrical grid for a couple decades. Oops. But, um but on the other side of that, it's pretty clear to me what the investment thesis is around this, which means the energy sector, particularly in the United States, I think is going to be doing particularly well uh for a a good long time going forward. Um and that's just the math of it. Barring something crazy like they nationalize our oil and gas industry or or forbid exports and force companies to sell at some prevailing rate the government has set, not what the market would set, you know. Those could be disastrous. But, that's how you wreck a country and you wreck an industry and you wreck the bottom layer of prosperity. And if we do that, uh what do you think about Costa Rica? No, I love Costa Rica, by the way. >> [laughter] >> I do. I wish my wife liked it as much as I do, but I love Costa Rica. But, yeah, I mean I I I mean that's dancing around the edges, but essentially it's full-on communism is what it is and controlling no free markets and and mass misery for all. Yeah. Yep. So, that's the energy story. Um obviously we'll we'll keep tracking that as time goes on, but um ooh, what a story developing there. It's amazing. It really is and that's like one of the reasons why we had we had developed us but took a little longer than I wanted to. >> [sighs] >> But building an energy stock strategy to participate in an obvious long-term trend that's adaptable enough to shift as that, you know, rolls through the system till we catch back up. And you know, it's one of those things where you just have to look at it and say, "Look, we need some exposure to this from a long-term standpoint." Carry a little bit more risk, a small percentage of portfolio can make a dramatic outcome. Uh make a huge impact on your your inflation protection from that standpoint it it assuming that the weight of the evidence seems to be clear. Probably going to take longer than we think or maybe quicker, who knows how it is, but the weight of the evidence is there and you just have to have exposure to it. You look at the cap weighting of the S&P 500, I mean, energy and anything from that standpoint is just minimal a percentage of the S&P allocation and I think we're going to see a massive regime shift going forward unless there's just absolute communistic type control uh within there. And uh but there's going to be plenty of gains there before that heavy hand steps in. Uh so, I still see huge opportunity in that space. Good. All right. Well, with that Paul, we are uh done for today. So, if anybody out there listening wants to talk to Paul or his amazing team, please go to peakfinancialinvesting.com, fill out a simple form, few questions in there, and some disclosures, and uh click send or submit, and then somebody from Paul's office will be in touch with you within 48 business hours to schedule what will be the first of three calls. You get a hey, an introductory call, then a planning call, and then finally if you get there a recommendations call, and if all of that sort of sorts itself out and it makes sense to work together, then you could go down that part of the road with Paul. Everybody who's gone down that process though, independent of whether or not they end up working with Paul and his team, says it's been a highly valuable process. So, I would encourage you to take advantage of that today while you can. I mean, there's no obligation. I hope you guys can tell we're not high pressure. If if we can help you, and all that is is the plan, then everything else will take care of itself. Well, thank you for doing that, Paul, and thanks for your time again today. You're welcome. Good to see you, Chris. All right. Bye, everybody. We'll be back next week with another episode of Finance You.