MacroVoices #518 Dr. Anas Alhajji: Debunking The 2026 Oil Bear Narrative

Professional finance. sophisticated investors. Economics. Bullish or bearish, no hold spar. Now here are your hosts, Eric Townsend and Patrick Serezna.

Macwell Voices episode five eighteen was produced on February fifth, twenty twenty six. I'm Eric Townsend. By popular request, Energy Outlook Advisors managing partner, Dr. Anis Alhaji, joins me as this week's feature interview guest. We'll discuss the events that have transpired in energy markets since doctor Ahaji's last interview back in November. Then we'll cover all the big geopolitical risks, and finally we'll end on the three big events that he's watching in this week's energy markets.

At the end of the feature interview, you'll hear Anna suggest another follow-on interview dedicated to the subject of President Trump. artificial intelligence, and their long and short term impacts on energy markets, including nuclear energy. Let us know on X if you want that follow-up interview, and if there's enough interest we'll organize a Twitter spaces to cover those topics separate from Macro Voices. Then be sure to stay tuned for our postgame segment after the feature interview.

When we'll have Patrick's trade of the week plus our latest perspective on all the major markets including the massive whipsaw in the gold market. And I'm Patrick Serezna with the Macro Scoreboard week over week as of the close of Wednesday, February fourth, two thousand twenty six. The SP 500 indexed down 138 basis points, trading at 6882. Markets looking heavy with some serious cracks emerging in the tech space.

We'll take a closer look at that chart and the key technical levels to watch in the post-game segment. US dollar index up 136 basis points, trading at 9764 the March. A WTI crude oil contract up three hundred and five basis points, trading at sixty five fourteen, continues to show resiliency. The March Arbob gasoline up three hundred and sixteen basis points, trading at one hundred ninety six.

The April gold contract down seven hundred and thirty basis points, trading up forty-nine fifty, a peak to trust twelve hundred dollar. Twenty plus percent drop. We'll go deeper into this in the post-game segment. The March copper contract down 118 basis points to 585. the February uranium contract down twelve hundred and seventy seven basis points, trading at eighty five seventy. A big mean reversion also happening in uranium.

The US Treasury yield up one basis point, trading at four twenty-seven. Key news to watch this week is the University of Michigan consumer sentiment and inflation expectations. And next week we have the retail sales. CPI inflation numbers and the delayed jobs numbers.

This week's featured interview guest is oil market expert Anas Alhaji. Eric and Anas discuss the 2026 crude oil outlook. why oil may stay range bound even with plenty of headline risk, and what it means for positioning and more. Eric's interview with Anasa Haji is coming up as Macro Voices continues right here at macrovoices.com. Joining me now is Dr. Anas Al Haji, who is the managing partner for Energy Outlook Advisors.

the former chief economist for NGP Energy Capital Markets, which of course is part of Carlisle Group, and former professor from the Colorado School of Mines. On us it feels like forever. It's actually just November, uh so really only a few months ago since we last spoke on this program. You really nailed the call then, everybody was super uh bearish and you were saying, Guys, no, the it's it's not time to be ultra bearish.

If anything, we have a uh a a bullish outlook here, which everybody thought was crazy and of course the market is up since then. What I wanna do honest is set the Wayback Machine to that last interview, which I think was the end of November. Tell us what's happened since then to date. in terms of significant events in the energy markets. But let's carry that forward in terms of what you see after today.

All the way out to the midterm elections, because I think that's really what's every on everybody's mind is President Trump clearly wants to suppress energy prices through the midterms. if he can possibly pull it off. So I'd like to focus on the various hurdles that he's gonna have to cross in order to achieve that. But let's start by going back to our last interview which was

fourth quarter of last year. Yes. Uh in fact I would like to go to the interview even before that. And the reason why, because in the interview before that, at the end of twenty twenty four. I predicted that oil prices will be in the seventies, range bound in the seventies in twenty twenty five. And if you look at the prices they w that was correct in the first half of the year.

But once you go to the second half, it was in the sixties and the prediction basically failed because we ended up with an average price of sixty nine that was w below the uh expectation. And looking back and say, Okay, what went wrong? Why I was wrong in this prediction? Now we go back to March and April twenty twenty five. At that time, the group of eight in OPEC Plus, the group that made the voluntary cut they decided to unwind the voluntary cuts and starting increasing production.

And my view was that we will have the seventies because I expect them not to unwind production or voluntary cuts, basically to uh continue with their ways of delaying the date to unwind. And what I missed at that time was something important related to today's event. What I missed was I was focusing on growth in global oil demand. because there were two conditions for them to unwind. The first condition is a major decline in oil inventories and that happened.

And the second condition was strong growth in um in demand, in global demand. And that wasn't there. There was a growth, but it wasn't that strong. But they did unwind anyway. And I found out basically the reason why because they looked at the growth and demand for their own oil. Not for the global oil demand. That's a big difference and makes a big difference for predictions, by the way. The idea here was the demand for them for their oil was increasing because of the sanctions.

It was sanctions on Russia, Iran, Venezuela, etc. And the demand for Saudi Arabia, Kuwait and uh Iraq and others basically was increasing. So from their point of view, they did meet the conditions and they started unwinding and then they expedited that.

So keep this idea in mind because I want to go back to it later on to talk about what's going to happen this year. Moving forward. We heard stories about a surplus because of the unwinding and we started getting uh messages from the International Energy Agency, from banks, that this is bearish, etcetera.

so i did debunk this bearish sentiment and been proven right on this one then they came up with the idea of oil on water and i did debunk this because they misunderstood that completely And uh just to give you an example here so people can remember what happened for example Brazil oil supply exports decreased. But their exports to China increased substantially at the expense of exports to the United States and Europe.

So what happened is the distance to China is three times that to the United States and two times that to Europe. So we ended up with more oil and water, but actual supply declined. Yet the media and others basically started talking about how the increase on oil supply uh in how the increase in oil on water basically is going to be bearish. And it wasn't.

Ξέρουμε ότι η κατάσταστασταστασταστασταστασταστασταστασταστασταστασταστασταστασταστασταστασταστα. We moved to December and the beginning of this year, and we had major production and supply loss. And that came mostly from three countries. The first one is Kazakhstan. We had a major decline in Kazakhstan. This is important in various ways because Kazakhstan was the major violator of the quota.

and within the group of eight and they uh did not cooperate with Saudi Arabia and others. And all of a sudden we have problems. What happened with Kazakhstan? This is a very important story. because it has an impact on various uh segments of the industry. Kazakhstan exports its oil from Russia, from a terminal called CPC. Υπότιτλοι AUTHORWAVE. Υπότιτλοι AUTHORWAVE. Υπότιτλοι AUTHORWAVE. Υπότιτλοι AUTHORWAVE. All of a sudden we notice that the Russians stopped exporting from that terminal.

About 10 days later, that terminal was attacked and supposedly we were told that they were attacked by Ukrainian drones. And that field basically uh the companies operating in that field they had to reduce production. Then drones attacked tankers, empty tankers were coming to CPC terminal to load the oil. And again we were told that they were Ukrainian drones. None of that makes sense.

Why Ukraine wants to reduce Kazakhstan's export? They have no interest. Why? They want to bother Turkey and attack ships in the Black Sea. I'm talking about all tankers. It does not make sense. But we lost almost 7-800 thousand barrels a day from Kazakhstan. And that took longer to bring back. It's been over two and a half months right now. And who has interest in that? And the fact is, the question is, who is the primary loser in this operation?

It turns out that the primary loser is Chevron, not Kazakhstan government, is Chevron. And why this is important? Because if you look at the sequence of events, they follow what happened in Venezuela. And who is the largest operator foreign operator in Venezuela? It is Chevron. And why Chevron is a threat to the Russians? Because Trump wanted to kick the Russians out of Venezuela. And who is going to take the over the assets in Venezuela? Chevron.

So the Russians been playing hard ball in this. It wasn't Ukraine. But we lost that anyway. That means that The surplus that the International Energy Agency and others are talking about has declined. And for from OPEC point of view, they don't believe in the massive surplus that the IEA is talking about, but they do believe in the seasonal surplus. And that seasonal surplus declined. Then we had another issue in Brazil where we saw a major decline in exports.

At the same time, we had this frigid winter, this snowstorm that it before it came to the United States, it went through the Middle East, by the way. including Iran. And because of that storm Iran's natural gas exports to Iraq stopped. Now Iraq got stuck. How are they going to provide power generation to their population? The only way they can do that if they burn more oil, which means that their exports are not going to increase as a result of that.

So in term of world supplies basically we've seen those reductions from Kazakhstan, from Brazil and from Iraq, and of course from Russia too, for various reasons. And then we got the storm here in the United States and Mexico and that reduced production in both countries. At one point we lost more than two million barrels a day.

So we have some major losses. that if you adopt the surplus story, now that surplus is almost gone. If you don't adopt the surplus story, the bullish sheath is very clear. And for the a group of eight that the uh and OPEC plus they are supposed to meet next month to decide whether to extend the pause on production increases or start increasing product. Our main scenario is that they will start increasing production for various reasons. One of them is that we lost all this oil.

That I've been talking about. Uh let me just push a little bit back on that. What's going on then? Because I haven't heard anybody else reporting that it doesn't exist. Uh as far as I know, Bloomberg and others are still saying that there is a very significant surplus. So you clearly have a variant perception. Why are they getting it wrong or or you know, why doesn't your story jibe with theirs? Yeah, I w I'll explain that to you and I'll tell you exactly what they are counting wrong.

So I will finish this segment about the decision of OPEC of the group of eight and then I will answer this question specifically. So f for the group they saw this large increase. If you look at the January numbers for OPEC plus, their supply declined according to Kepler. By 2.7 million barrels a day. And that does not include the decline in the United States.

at all. Or Mexico. Well, it doesn't include Mexico, sorry, because Mexico is part of the group. But it does it doesn't include the United States. So the decline basically is larger than two two point seven million barrels and they look at it and say, you know what, that that seasonal surplus that we saw in our calculation does not exist. That is a reason basically to increase production. But there are more reasons uh than that because

there are two religious events r in the Islamic world and of course mostly the Middle East that increase uh uh the demand for oil. The first one is in about A couple of weeks from now, probably like almost 17-18 days, the holy month of Ramadan starts. And there are 44 Muslim countries around the world, but let's focus only on the Middle East now. We do have enough evidence to show that energy demand during the month of Ramadan increases.

And for the for the countries in the Gulf region, whether you are talking about the Saudi Arabia, Kuwait, UAE, Oman, uh uh Iraq, Iran, all of those countries, they are Muslim countries. uh their demand for power for power generation increases and that increases the demand for oil. So if the group starts increasing production in April. One of the reasons why they want to do it because their inventories decline and they see the increase in demand in the player month in in in February and March.

Right now as we speak, if you look at Saudi Arabia, they are preparing their inventories, they are storing petroleum products in preparation for Hajj, the pilgrimage, where millions of Muslims come from all around the world. that's around late May, um, to perform Hajj, which is one of the main pillars of Islam. A day. What that means is this increase in production, if they start increasing production in April, the world is not going to see it. It's going to be consumed within Saudi Arabia.

And to go back to February and March, uh for the month of Ramadan, what the Saudis basically have been doing is part of the Vision twenty thirty is to increase tourism. And they focus on religious tourism. And part of increasing r religious tourism is that they want more worshippers to come to Mecca in the holy month of Ramadan. So we are going to see probably record numbers

coming to Saudi Arabia during the month of Ramadan. So that's another increase in energy demand which increases the demand for oil which means that some of those increases are going to be consumed domestically. But by the time the Hajj ends in May, the summer months where demand for cooling increases substantially and they start using oil in power generation. That means it's going to eat up all the increases in April and after that and all the previous increases last year, or most of them.

So there is this surplus idea basically has no legs. But to answer your question specifically about what Bloomberg and the IEA and everyone got wrong, I have two answers for that. The first one is if you look at US crude oil production since the beginning of twenty twenty five until today. It's been increasing. And the confirmation we have is until the end of October, it's been increasing.

So that sounds bearish and that should create a surplus. But here is the problem. The US government locked up more oil in the strategic petroleum reserve, the SPR. than all the increases include oil production since the beginning of twenty twenty five. So what they are doing is they are counting this as a surplus, but this is really a locked amount that is not available to the market.

So that's one mistake. So when you do Excel sheet and they count it as as an increase in production, it looks w to them like it's a short block. So that's one. The other one is if you look at all the inventory increases. since the beginning of 2025 or since August, because that's where the sharp increases started. If you look at all those increases, you see two things.

First of all, they are concentrated in few countries. So this is not worldwide. And if you look at that concentration, most of it is in China. and you study every country on its own from the other countries that uh if you exclude China, you find out that the increase in inventories was a replenishment. It wasn't even a an actual increase. It was just a replenishment of low inventories. Remember when the group of eight increased their production

last April they did that. Why? Because inventories were very low. So, in those countries, it was just a replenishment. But for China, they increased their inventories by more than 100 million barrels. Since then. And there until three, four weeks ago, uh the level of inventories in China was the highest on record. And the question is Is this a strategic decision, or this is just a commercial decision?

And if you look at the behaviour of China for the last three years and how they are storing everything. In terms of energy, they are storing oil, they are storing natural gas, they are storing coal, and the inventories of each basically reach record high. That does not indicate it's a commercial decision.

At the same time, you look at their policies, they are investing heavily in upstream to increase their own domestic oil and gas production and they were s very successful in terms of natural gas. Although the cost is very high. That is not a commercial decision. The fact is, everything China is doing looks like it's a preparation for either war or sanctions. And for either one, they want to build up their domestic energy sources, including solar and wind.

And that why that is why the demand for storage batteries is going through the roof. and China although it is very expensive. because it is a strategic decision. You cannot argue with a strategic decision. You cannot go and tell them, Oh, it's subsidy is it is subsidized and it's expensive and when you are talking about the survival of a regime or a survival of a country Those financial arguments do not make any sense. They don't fit. It's a waste of time. So most of that increased.

in inventories in China are based on strategic decisions and that oil or most of it should be counted the same way we count the US strategic petroleum reserves. So they are counting those as a surplus, and it's not a surplus. To give you another example on this, I call it the Manufactured Surplus because it is made of an Excel sheet. At the beginning of 2025, the IEA predicted that U.S. oil demand would increase by only 60,000 barrels a day.

That was very low. Others, including OPEC, basically have a very high number. And we're looking at the actual numbers and we can see where the IEA was wrong on this. US oil demand was way, way higher. Toward the end of the year, the IEA was forced basically to upgrade its forecast. And uh we got surprised by the end of the year and the latest report, they increased their forecast for US oil demand from sixty to one hundred and seventy.

I mean really they did not see all of that throughout the year? To 170, and that hundred seventy is still below the actual. So you can see that it was manufactured, uh manif manufactured surplus.

So that's the major difference between what I see and what they are talking about. Honest, let's go back to the outlook uh from here to the November elections. What's on the horizon? What do we need to pay attention to? And how do you see it playing out? So this bearishness is that the IA and Goldman Sachs and others are talking about basically has knowledge. So we are not going to see this major decline in prices. And I know President Trump basically was talking about

uh uh oil prices in uh are I think around fifty five. He was talking about WTI. So this is whatever prices we are going to get is close enough, but he's not going to get his way. But what's going to happen is the the bearishness basically is not there. And if for some reason oil prices start rising China will do the dirty work for President Trump. Because we know from the last ten years, when Brent basically goes above seventy, they start releasing oil from that inventory they have.

That's why we predict the prices to be in the sixties, range bound for Brent in twenty twenty six. Of course you might get like daily spikes or hourly spikes here and there for various reasons, but in general prices are expected to be in the sixties, range bound, because the bearish story has no legs and China is going to use its inventories to prevent prices from going up. Uh so here comes the election. Trump basically is not getting his wish in term of the exact number.

But he is getting his wish in terms of low gasoline prices and low oil prices in general. So he will get it before the election.

Let's move on to geopolitics, starting with Venezuela. that everything was prearranged w and it seems probably the CIA and other groups basically were uh arranging this with the current government or some he some people in the current government in uh in Venezuela. But still, the devil is in the detail. how they are going to get the oil sector up and running and what they can do.

response that we get from Venezuela is an increase in production and exports probably by about two hundred to three hundred thousand barrels a day above the pre crisis level, if you want to call it a crisis or whatever you want to call it, just before the Maduro arrest. or before the blockade that Trump imposed on sanctioned tankers.

So above that they were producing about eight hundred to nine or supplying about eight hundred to nine hundred. Uh based on our calculations they can go to one point two quickly. Of course, all they need basically is mostly NAFTA from the United States. We've seen NAFTA exports to the United States increasing because they want to mix it with heavy crude, so they can put that in the pipelines and they can move it.

The issue after that is they need a lot of money and they need the technology and they need the oil majors to come in. and any meaningful increase in production after that will take time. Based on experiences from all around the world, from countries that experience political turmoil and problems, on average it takes 3 years to increase production by 1 million barrels a day.

And people are saying we heard this and various places around the world, whether they are talking about the Arab world or Europe. uh especially France, they talk about India, uh they are talking about well Trump wants to uh control the Venezuelan oil and he wants to flood the market and destroy OPEC and keep prices low, etcetera. İzlediğiniz için teşekkür ederim.

This is a complete nonsense. Why companies have to go spend billions and billions of dollars only to destroy themselves? That does not make any sense. Αυτό δεν είναι η πράγμα. Η πράγμα που θέλω να πηγαίνει όλοι, είναι η πράγμα. Αυτό είναι η πράγμα. Αυτό είναι η πράγμα. Αυτό είναι η πράγμα. Αυτό είναι η πράγμα. Αυτό είναι η πράγμα.

Let's remember the following. In three years, global oil demand will grow by three to four million barrels a day. Even if you want to g be very conservative, it will grow between two and four. So that's the growth in global oil demand. But decline rates are going to reduce production by ten to twelve million barrels a day. So three years from now, I need about fifteen million barrels a day of fresh oil.

And it's not going to crush the market. And it has no impact on OPEC or OPEC Plus or the group of eight at all. So that's one part of the equation. The other part of the equation is Where the money is going to come from. At least right now to to start, we need about twenty billion dollars. Where who is going to bring that money? If you look at the history of the oil industry

We are going to find out later the following. That the oil companies that are going to go in, they are going to switch investment from one location to another. So if Venezuela is going to get 30, 40, 50 billion dollars of investment, that's going to be at the expense of somewhere else. And therefore, a few years from now, when Venezuelan production is going to increase, let's remember that that somewhere else has zero production.

So it's not bearish. And it cannot be bearish. The other related issue is we have to be mindful of crude quality. And this is a big problem because those who believe in conspiracy theories, they promoted the idea that Trump wants to control the Venezuelan oil Now the statement that the refiners or the refineries are configured for Venezuelan oil is absolutely correct. But the rest of the story is incorrect because we get all that oil from Canada and Canada is not Venezuela.

Let's remember when we talk about Canadian crude, what we have here. First of all, the quality of the Canadian crude is way better than the Venezuelan crude. We have a web of pipelines that is bringing uh or good infrastructure that is bringing this from Canada. from responsible companies, a stable politically stable country. But what is different about the Canadian crude from others is that it comes with long life and low decline rates because it's oil sand. That's not the case in Benzuela.

So those refiners, those who are adopting the uh conspiracy theory and they are talking about the refiners, they are missing the point that those refiners basically are getting a good deal from Canada and as you know, Canadian crude is sold at discount too. And if you look right now at the situation What we see the following.

We were told by the Trump administration that now the Venezuelan oil under the control of the Trump administration is being sold at a price that is thirty percent higher than the price sold to China. This statement is correct, but it is intended to fool people. That's not really the full story. The full story is the Trump administration allowed the two trading houses To buy the Venezuelan oil at the price that China was getting. So Venezuelan oil was sold at the same discount.

But those companies are selling it or trying to sell it to others at a price that is 30% higher than before. But Venezuelan oil basically is sold at the same discount that China was getting it. And now those trading houses are having serious problems because they are not able to sell that oil. China is not buying it. India is still compromising. And that oil is not going anywhere. You look at the recent data from Kepler, most of that oil is going to the United States.

And if it is going to the United States, the question is, is it replacing Canadian crew? And if it is re replacing Canadian crude, that means we are going to see price differentials for uh the um West Canadian Select basically getting hammered uh because of it.

Honest, let's move on to Iran. This is confusing the heck out of me. Uh at first it seemed like a strike was imminent. We were repositioning half of the US military fleet to uh the Persian Gulf getting ready to for a big strike, and now it seems like President Trump wants to kiss and make up with Iran. What's going on here? It seems that there is this general realization in the whole region in the Middle East that a collapse of the regime is the worst disaster they can have.

A collapse of the regime basically will lead to many issues, including civil war within Iran. and massive migration to the neighboring countries. Let's remember that the population of Iran is over ninety million people. And is surrounded by all those countries and who wants to get migrants in this case? Pakistan has its own grievances with the Blushistan province.

And because they want to be independent, if you have a collapse of the regime in Iran, they are going to gather on the Iranian part and literally launch attacks on Pakistan. That's why Pakistan does not want. And the Turk Turks basically do not want the Kurds to start to establish their own Kurdistan and Iran and launch attacks on Turkey. And then the other Gulf states do not want to uh they don't want the flood of immigrants.

Uh, neither Iraq. They don't want the flood of immigrants. So the collapse of the regime uh is a serious problem. And it seems everyone realize that there is no substitute. إلا أنهم تفعل شيئاً بشيئاً بشيئاً بشيئاً بشيئاً بشيئاً بشيئاً بشيئاً بشيئاً And by doing so, of course, that means all the opposition gets burned. So uh all the Iranian opposition basically gets burned in this and just like what happened to the Venezuelan opposition.

They got burned. So bes aside from that, the the picture was very clear. Do you want a total chaos in the region or you want to work it out? And the issue here is there is no substitute and I'm probably that what scared the hell out of everyone. Just to briefly talk about the oil impact. We always hear about blocking the hormone straight, blocking the hormone straight.

Look, Iran cannot block the Hormuz Strait. And it is not in the interest of Iran to block the Hormuz Strait. Most of their imports come through the Strait. Most of their exports go through the Strait. And if they and at the same time, blocking the street will hurt Iran's friends, but will not hurt Iran's enemies. If the strait is blocked, Israel will not be impacted at all.

The impact on the United States is extremely limited. But you look at India and China and other Asian countries, they will have serious problems. So let's drop this idea of blocking the hermost rate, yet Some um militia or some cronies, etc. can cause trouble in the area. Yes, no one can deny that. We've seen it before. I just want to point this out.

Honest, let's move on to Russia Ukraine conflict. Uh what do you see on the horizon there? And if this does eventually get resolved with some kind of peace deal, is that massively bearish for prices because all of the Russian Supply comes back online or is it more complicated than that? It is more complicated than that. First, if you really look at it, Russia cannot increase its production anymore. That's it.

And if we end up with a peaceful resolution, Russia will spend the first few months repairing its refineries. And once the utilization in those refineries go up, that means their domestic demand for crude goes up. Therefore, Russian exports will decline. And that is bullish.

So it cannot be bearish. That's one. But uh of course w here we are talking about oil, but when it comes to natural gas and L and G that's a different story. I'll talk about that in a minute. But the main issue that we should focus on is this. What happened after the sanctions were imposed? Trade patterns in oil worldwide changed. And oil that was going to Europe now is going to India and China. And we've seen those massive activities in the Swiss Canal and the Red Sea.

Now, if we end up with a peaceful resolution, we are going to see some changes in that rate. we are going to see some reduction in insurance. We are going to see uh for the dark fleet, for example, and probably this one of the most important point in this podcast today, we are going to see massive retirement in the fleet. because many tankers kept alive because of the sanctions.

And those tankers basically are uh twenty five years uh old that they've been in uh basically in in salvage long time ago. So we are going to see a massive retirement in the fleet. And that means we are going to see a another face to the shipping industry uh that we don't see today. So most of the implications are really on shipping, not on actual production. And whatever cost is associated with that, whether reduction or higher cost, but definitely insurance cost will go down.

Today in the daily energy report, basically we focused on the EU because today they released or they published the regulations that phase out the Russian gas from Europe. And we ask the question, okay, now you are going to face this, but what if the war ends? And what if these sanctions are relaxed? What are you going to do with those regulations?

And by the way, when you to look at those regulations, I just want to point out one thing that in those regulations, under the guise of phasing out Russian gas, the EU is trying to phase out US L and G. Because instead of targeting Russian gas, what they are saying is we want to do two things. again under the guise of Russia. We want to literally diversify our LNG imports and reduce our fossil fuel imports.

So this is really targeted at the United States. This is one of the unintended consequences of the Trump administration talking about Greenland and trying to impose tariff and trade wars, etcetera, on the EU. So th this this is today. You can read it and see that w what's going to happen later on. The United States imposed sanctions on uh the LNG plants in Russia. There are three plants, they impose sanctions on them, and they impose sanctions on the tankers that carry those this LNG.

The imposition of those sanctions on those LNG plants and tankers has nothing to do with Ukraine. This is part of the LNG war. This is part of the idea that LNG has become an integral part of US foreign policy. It's a a tool that is used for national security. So the question we have is, if we have a peaceful resolution in Ukraine, what is the fate of this? Based on our thinking The U.S. will relax sanctions on Russia, but when it comes to LNG, it will be very difficult to relax those sanctions.

Annas, we've been talking about a lot of long term issues. Before we close, I wanna move on to this week. Uh of course this podcast will air on Thursday. We're recording it on Monday. afternoon. Tell us uh I happen to know you've got a bunch of stuff on your mind because I follow your uh subscription Twitter account. Uh what's going on this week? You've got three big things on your radar. Yes, there are three things this week. The first thing is Aramco

Saudi Aramco released its OSP, the official selling prices on Thursday. This is very important because it tells us what they are planning on doing in the market regardless of the meeting on Sunday. So uh the market basically is expecting lower prices. If they lower the price that means the Arab light price will be the lowest in five years. But I don't expect that. I seriously expect for the reasons I explained early in the show, I think either we'll keep them flat or they will raise

So that's on Thursday. And then on Friday, the EIA will release its November data. It's supposed to release them last Friday, but because of the snowstorm and the closures, they decided to delay them by one week. well whether the production is still growing or not. Shell production everywhere in the United States has been declining except in New Mexico. And everyone is looking at November to see whether New Mexico's production continue to increase or that's it.

And if we end up with a peak, again, I don't believe in a terminal peak. So I believe in multiple peaks. So for now at least for the this period, if shale peaks, this is very important. Why? Because the Trump administration will kin ji will continue building the SPR.

And the third one is, we want to know the fate of those negotiations with Iran. Because by the end of the week, basically, we will know whether the negotiations are going well or not. If they are going well... that means more pressure on prices to go down. And if we hear that someone walked out or someone is angry, immediately we'll see two, three dollars increase in prices. So this is just just this week. These are the three issues this week.

I wanna go a little bit deeper on shale because this is something I've been talking about for a long time and I wanna get your take on it. You know, honest there were a lot of people about twenty years ago, maybe nineteen years ago, around two thousand seven who were predicting a catastrophic energy prices because of decline rates not being able to keep up with growth in demand.

they ended up being ridiculed as is horrendously wrong. In reality, there was actually some very credible analysis behind those predictions. What they failed to consider was the US shale revolution and how dramatic it was going to be. And as far as I interpret the market, it's the US shale revolution that basically saved the world from a, let's say, between two thousand eight and two thousand ten energy crisis.

And, you know, congratulations to the men and women of the the US uh energy patch. They did a fantastic job. If you're saying that that's really peaking and and you did clarify that, but I want to go a little deeper on what you meant by a final peak or a terminal peak. If we get to a terminal peak where there is no more growth in US shale and decline rates continue to occur in the rest of the world,

That says to me that we've got a major energy uh supply problem, not in the next week or month, but over the next decade. Am I missing anything there? And how do you see this? The way you stated it basically is absolutely correct. I just want to point out that uh if all prices go up in the future, to say two hundred and twenty dollars uh you will see uh shale production increasing again. This is different from the past because the in the past we were talking about peak

oil production because of the lack of resources. We don't have problem with with resources. We have problem with the economics of it. So if oil prices go higher, we are going to see another increase. We we know where the shale is. We can get it. It just it needs more money. So we can get it. The other thing is this by the same talking about shale, remember you can apply the same arguments about Guyana and Brazil.

The same exactly the same argument. So we ended up with those um two areas increasing production uh substantially. What we are going to suffer in the future from is this gap. So think about it as like demand is growing linearly, while the production is growing like like stair steps. And if you put them above each other, you can see the gap. In between.

And those are going to lead to the spikes in prices. The only thing is, those stir steps basically are not even. Some of them are very wide, some of them are very high, some of them are very low. And and therefore the extent of the crisis depend on the differences between the shape of this uh staircase and that linear line uh of demand. But I want to point out before we end the show that

of the shale peaking or not. If you go back to 2017, I created a hashtag at that time called Crude Quality Matters. And this crude quality matters basically, the conclusion of that research was There will be a time when the demand for light sweet crude is going to peak. and we are very close to it by the way i'm talking about the light sweet crude i'm not talking about oil in general

So what happened is why we are exporting oil in the United States. We are exporting oil because we reached a refining wall in the United States. We cannot refine additional light sweet group and therefore we have to export it. This refining wool is is going to expand more and more around the world if shale continues to grow until we reach a point where no more. So, if we are not going to hit a peak on production, we were going to hit a peak on demand for that light sweet fruit, anyway.

I just want to point out this point.

Final question on us. It seems to me that President Trump has a very strong incentive to try to keep energy prices down, specifically through the November midterm elections. Now, just knowing President Trump uh Mr. Art of the Deal.

if there was somebody, uh some trading partner he could cut a deal with and say, look, I'm I need you to to help me out, increase production, do something to get the prices down just through November, and if you do that for me, after that I'll let you raise them as much as you want. If that were to play out, obviously it creates a very interesting tradable scenario. My question to you is.

Is there anyone who's able to deliver on that from the other side? Could Saudi Arabia make that deal and actually increase production and deliver on it? Or is there really nobody in a position to help him out of this squeeze? It doesn't matter. And the reason why because anyway you look at balances, prices will remain range bound in an acceptable way. So this is not a big deal to Trump at this stage. But probably we should have another show very soon to discuss Trump, AI, energy and oil.

Because this is really because the the issues could be deeper than just Trump wants low energy prices, because you cannot have AI and be a years ahead of China without energy. And that energy has to be abundant and has to be cheap. If you look at the national security strategy that I forgot what the name is that we released about two months ago. What is the main theme in it? The main theme is to control the world, you need two things. You need energy, abundance, and you need AI.

But the issue here is you cannot have AI without energy abundance, and all of a sudden it is about energy. And to have AI and the growth and to be ahead of everyone, you need that to be cheap. So the story of Trump now in the second term could be completely different from Trump in the first term because it's not only about elections and low prices.

to win elections or his hate for the oil industry, the historic hate for the oil industry, it is really probably about something way larger and it is supported by the deep state, not only Trump. Honest, I love your idea of doing another interview. It won't fit in this one.

uh for sake of time, about AI and energy and where it's headed, because I have a very strong view in this. So many people are counting on nuclear energy and as much as I'm a nuclear energy proponent Uh I don't think that the people expecting that understand the lead time for building new nuclear energy, I think natural gas is going to have to stand in and that's gonna be the big story of the AI boom.

Why don't we do that in a separate uh Twitter Spaces interview so that we can get that done sooner? Uh every time I get you on Macro Voices, everybody wants to hear about oil and gas. But for the audience who wants that, be sure to follow us uh both myself and on us on Twitter and at some point in the near future we'll organize something along those lines and we'll uh we'll tweet it out so everybody knows that it's coming sometime in the next few weeks.

As we wrap this one up, I just want to ask you before I let you go. Tell us a little bit about what you do at Energy Outlook Advisors. You've got a uh terrific newsletter. Your Substack is extremely popular. You've also added uh uh lower cost uh subscription Twitter service where you can get uh briefings and in private uh uh Twitter spaces and so forth.

Give us the whole rundown of what's on offer and where people can find out more about your services. And while we're at it, uh are you still available to do uh keynote speeches? I know you've been very popular uh with those as well. Yes, basically I'm uh I'm uh traveling uh soon for those speeches. Uh this is really w where I spend most of my time basically doing those speeches, preparing research for them, etcetera.

On the Substack we do have uh two uh a report and a newsletter. The newsletter basically is very popular as you said, and it's ranked highly among the top uh business newsletters uh on Substack. And this is intended for institutional investors and companies and we do a lot of things in details, etcetera. And then we have the daily energy report. This is designed for companies and individuals. It's just like four hundred twenty dollars a year.

Uh but we bring a lot of stuff that does not exist anywhere else. a lot of insights that literally do not exist anywhere else. And uh people know that we went against the grain several times and we were we've been correct. And we have the Twitter uh uh subscription too. This is kind of very low cost uh subscription, we'll put some stuff uh on that. And then I do a lot of uh Zoom calls

with clients from around the world for those who are interested to do like one hour uh talk or one hour presentation. I do a lot of that too. Uh but w i the the point I would like to mention here uh regarding all those subscriptions, etcetera. If you think that if you subscribe and you think it's not valuable, just call me, contact me, and I will cancel that subscription and I will carry the cost.

Whatever that thing is, I will carry it. If you really feel that it's not valuable. If you want to cancel for other reasons, that's your problem. But if you want to cancel because of the quality, I will carry that cost.

Well, honest, it's hard to argue with a money-back guarantee. Patrick Serezna and I will be back as Macro Voices continues right here at macrovoices.com. Now back to your hosts, Eric Tellman. And Patrick Serezna.

Eric, it was great to have Anas back on the show. Now listeners, you're gonna find the download link for the postgame trade of the week in your research roundup email. If you don't have a research roundup email, that means you have not yet registered at macrovoices.com. just go to our homepage, macrovoices.com and click on the red button over Anassa's picture saying looking for the downloads.

Patrick, doctor Anas made a compelling case that crude can stay more resilient than the oversupply narrative suggests. But the tape is still looking hostage to geopolitics and headline risk. So the real question in my mind is if you buy his framework, what's the cleanest way to position for it without taking blunt Delta One exposure in a market that could whip around on a dime? Eric.

Coming out of Anasa's interview, the setup I am focusing on is a market that can stay range bound in the sixties, but still carries real headline driven upside risks. This shows up directly in the option surface as there is a distinct right tail skew where upside calls price rich volatility relative to the downside. Instead of paying full freight for upside optionality, I'd rather use the SKU to finance a bullish structure with defined risk and minimal carry drag.

So for this week's trade of the week, I'm looking at a bull call spread in the WTI options reference to the April 2026 crude future trading at 6415. I'm looking at the March 17, 2026 XPRE options with about 40 days till expiration. So here's the trade of the week. a twelve dollar in the money bull call spread. We buy the April sixty in the money call for six dollars and fifteen cents, which has an implied volatility of forty four point seven percent.

and sell the April 72 call for$2.25, being priced at an implied volatility of 58.4%. That's a 60 by 72 bull call spread for a$3.90 debit or about$3,900 per one lot spread, a thousand barrels. The key feature is that you're buying lower implied volatility and selling higher implied volatility.

And here's the key, the break-even comes in around$63.90, which is about 25 cents below the current futures price of$64.15. In other words, You don't need a rally just to get to flat at Experi while still maintaining a better than a two to one payoff profile. From here, your payoff is clean and defined. Your max loss is three dollars and ninety cents if crude settles at or below sixty dollars at expiration.

a max profit of eight dollars and ten cents if crude oil settles at or above seventy two dollars. And most importantly, if crude oil is unchanged at expiration, this structure is still slightly profitable because it's an in-the-money spread with a break-even below the market. So the intent is simple. Stay constructive on crude. Use the right tail skew to keep carry costs low and participate in upside over the next six weeks with a clearly defined risk.

All right, Eric, let's dive into these equity markets. Well, Patrick, I'm reading a lot of pundits saying that they think equity markets are generally undergoing a drying up of liquidity, and bearish predictions are starting to replace the chorus of permables that were dominating the news flow until now. I I'll be honest and say I really don't have any strong short term conviction in either direction on the broad equity market.

But longer term, I'm still of the strong opinion that the great stock bull market of the early twenty twenties is in its late stages, if not winding down, while the great commodity bull market of the late twenty twenties is just getting started. I can't call the short term timing, but I think that's the big picture. Patrick, what are your thoughts? Well, Eric, I wanna focus on the S P five hundred purely from a quantitative perspective and a technical perspective.

Uh at this stage, uh the S P five hundred has found substantial overhead resistance over the last few months, and that has diverged from the S P five hundred equal weight index, which has continue to progress higher as there has been a clear sector rotation getting underway. And uh so what we're with this overhead resistance, one thing that we made very clear over the last few weeks was how important the mag 7 and the mag 7 earnings were going to be on the path.

In order for the S P five hundred to progress to seventy one hundred to seventy four hundred on the upside. we would have needed uh the Mag Sevens participating. There are one third of the uh market capitalization of the S P and two thirds of the capitalization of the Nasdaq 100. And so we have a scenario where uh where they well we really needed to see a positive tailwind come from there. Now we've seen almost all of these earnings. There's obviously M Amazon still ahead of us.

But overall they have generally disappointed. Now uh what I want to start off is page five looking at the tech software ETF, which is the symbol IGV. This is your Microsoft's oracles and so on in there. You can see we have a 30% crash in this ETF. as it has broken all support lines and heading right back uh to liberation day lows. There is a clear breakdown happening in the space.

This is obviously influencing the NASDAQ 100, which is on page four. And what you can see is after a double top, we have now broken the December and January lows. and close below the fifty day moving average at levels where CTAs and vol targeting funds will actually start to do systematic selling. And so we are in a situation where the uh uh the underpinning support of the market is massively deteriorating. Now on page three where I have that S P five on a chart.

We can't technically still see the breakdown underway. But we have the first attempt to close below the 50 day moving average. and a very large amount of systematic trading that will start to hit the bid below sixty eight hundred. This is an incredibly fragile moment. Now uh is this a doomsday bear market? No, we had an amazing bull market from April

all the way up to here. Uh in and inevitab inevitably markets correct, no different than we see on all sorts of the other uh uh commodities and so on. At some stage we're going to have a correction here and the question is did the disappointment of these mag sevens make it more inevitable at this stage? If we start breaking those levels, we can see Spikes in implied volatilities, if we see breakdown in financials, if we see junk bonds breaking key support lines.

and see credit spread starting to widen. This can turn into uh a a bigger correction, something that could be not just a five percent dip like we saw back in November. But it could become a ten plus percent market correction that would of course in the end, wherever uh it stalls out, would be a buying opportunity. But at this stage the market looks highly vulnerable uh going here into the first uh week of February.

All right, Eric, let's touch on the dollar. Patrick, the bounce off the long term lows has been vigorous for the last week, so an argument could be made that the september seventeenth and january twenty seventh lows on the dollar index form a bullish double bottom pattern. But in my view, this is a headline driven market, and I don't weight technical analysis as heavily as I usually would. I think we had a solid downtrend in play that was probably set to take us to new lower lows.

But then the market's reaction to President Trump's nomination of Kevin Walsh for Fed chair to replace Jay Powell brought on a sudden reversal that's all about the market's perception, which I think is wrong that Walsh will be much more hawkish than President Trump expects him to be.

If that's the right interpretation, in other words, if my variant perception is correct that Warsh is actually going to give the president whatever he wants, Well, you know, clearly that's a speculative view, but if I'm right on that, I think the the stage is set for the rally to continue only until the market figures out that Walsh isn't going to be the permahawk that many market participants perceive him to be. Then I think we would eventually move to new lower lows.

The question is how long does it take for the market to figure out that they've got it wrong and that Walsh is going to give Trump whatever he wants? At least that's my view. Time will tell. Well Eric, I wanna look at the dollar again, just purely technical. We had a break to a lower low from last year, which has really opened the downside window. Now this bounce is the big tell. We came back toward the 50-day moving average, back towards the 50% retracement.

and a level where what were last year's lows act as overhead resistance. This 97.5 to 98 level is going to be the top. If the uh story is that the first quarter of the year is the dollar uh uh bear market resuming, we should see this be a key failure point. Uh and so this is kind of a make it or break it moment. If the dollar surpasses ninety eight. and goes back into the trade range. then it neutralizes the cell cycle. Doesn't necessarily make it bullish.

But it means that the the dollar weakness is not a first quarter story. And so we're gonna literally get the most valuable information right here, right now. Let's see what happens at this level.

All right, Eric, let's talk crude oil. Obviously we heard from Anas, but uh how do you size up this current market? Well obviously the feature interview covered crude oil in detail, so I won't belabor the fundamentals. My feeling is that there's still a lot of geopolitical premium in the oil market and we gotta wait to see whether or not President Trump makes a kinetic strike on Iran to know what the next leg is gonna be.

That means the market could go either way in a hurry depending on what happens on that geopolitical front. Now if we get a de escalation of geopolitical uh freemium that takes us all the way back down to fifty five dollar WTI. I think that's a buy.

Meanwhile, my time spread trade, long Z six Z seven, continues to perform beautifully, profiting well over two dollars since I opened that trade several weeks ago. And yes, two bucks doesn't sound like much, but that's a pretty big move on a one year time spread. in a relatively short time frame. Finally, doctor Annas requested a President Trump slash AI slash oil and gas slash nuclear follow on interview.

I love the subject matter, but we can't do it on macro voices. We have scheduling rules that we don't put the same guest on, you know, two weeks in a row or in rapid succession. We try to keep them separated by a few months. So let us know if you want that topic by replying. to the tweet announcing this episode on X T tag Anasal Haji as well. If there's enough interest, we'll organize a Twitter spaces or something and uh you know announce it separate from the podcast.

So follow along on Twitter or X as it's called these days if you want to uh to get in on that one as well. Well, Eric, obviously we already touched on this during the trade of the week. Overall, uh the pattern I see here is that old dips are being bought. Every time uh it comes in with a two, three dollar drop, the buy-on dip traders come right back in.

Now, uh, obviously uh I am not super bullish. Uh I think Anas is right that there's political influences here, but short term liquidity squeezes could send oil up into the seventies on WTI, even though it probably will revert. Uh after making such an advance. This is where I want to be tactically short-term bullish oil, uh, but at the same time recognize that you probably have uh a ceiling on top of any advances that will be met with some selling if we do get those bull impulses.

All right, Eric, we gotta talk about gold here. Boy, oh boy, Patrick, talk about a whipsaw. Now the Kevin Walsh nomination was just the proximal catalyst, not the cause. The reason this happened, the real reason, is simply that the market had moved up way too much, way too fast, in a parabolic move that made this outcome both obvious and likely.

The good news is that this was really easy to see coming, and as regular listeners know, I've been pounding the table for a couple of weeks saying this market was ripe for a sharp correction to fill the gap around forty six hundred. Now when I recorded last week's podcast, April gold futures were trading above fifty six hundred.

But by the time that episode was released, just a few hours later, they had already moved five hundred dollars lower. The selling started right at the European Open, which was just a few minutes after I recorded the last week's podcast. I said last week that a thousand dollar correction was entirely possible. Well, we got closer to a twelve hundred dollar correction instead. And to be clear, I'm not at all certain that the bottom is in yet.

The classic blow off pattern starts with a really ugly down candle. Well, that started at the London Open last Thursday and continued through Friday. Then it got really ugly on the Sunday night overnight session into Monday morning. Next comes the bounce, typically around fifty percent of the overall move down. And this one has been textbooks so far. The fifty percent retracement level is fifty twenty four five zero two four on the April Futures contract.

On Monday and Tuesday we rallied up to just over fifty one hundred, or just above that fifty percent level. Then the rally failed in textbook fashion, suggesting perhaps it was a dead cat bounce after all. and the price dropped right back down to test the thirty eight point two percent fib retracement line, which is at forty eight eighty two on the April contract.

It bounced from there on Wednesday afternoon in New York trading and started to rally into the extended trading hours session on Wednesday evening, but it failed again just above the fifty twenty four fifty percent retracement level. that set up the beginning of a series of lower highs and lower lows. From there it dropped to well below the thirty eight point two percent level that it held during regular trading hours.

And frankly, this pattern portends a retest of the forty four twenty three low that we saw early in the wee hours of Monday morning. Now at recording time it was trying to stage a bounce back, and I'm recording just before the uh European Open on Thursday morning. It's trying to stage a bounce back above the thirty-eight point two percent level. Let me curm my head and check the chart.

Okay, we're above the thirty eight point two percent level, maybe halfway back up to the fifty percent level, but even before the European Open, it looks like it's starting to stall. And what we saw last week as well as on the earlier correction this week is it was right on the European Open at four AM Eastern time when things really started to get ugly and take a turn to the downside.

So we'll have to see what happens, but in order f to not have a retest of the lows, we really need to get above the fifty percent line. That's five zero two four. And preferably what we really need in order to kind of create confidence that maybe the bottom really is in would be a daily close or better yet a weekly close, uh perhaps on Friday. Above the 61.8% fib level, which is 51.66. That's 5166.

on the April futures contract. As of recording time, the pattern since the European Open on Wednesday, when the bounce stalled and reversed, looks more like a series of lower highs and lower lows. So if we don't get back above the fifty percent retrace line, which again is five zero two four pretty quickly and stay above it.

then we're likely headed towards a regular trading hours retest of the forty four twenty three low, which was right at or approximately close to the fifty day moving average. Now, as I've said many times before on Macro Voices, I predict that this great gold bull market will eventually end in tears with a gigantic blow off top.

And to be clear, what we've seen in the last week is exactly what the first stages of what that exact kind of blow off top would look and feel like. But I don't think this is the big one. The fundamentals are still strong and the Trump administration's bold policy initiatives will continue to foment central bank buying.

Now of course it's always possible that this really was the big one, and it will be another decade before we see fifty six hundred again. But I think that's a five percent probability at best. My 55% likely base case scenario is that we'll consolidate here for several weeks to a few months. in a pattern similar to the thirty five hundred dollar top back on april twenty second of last year, which wasn't topped again until early September.

And to be clear, that fifty five percent base case of a consolidation might include a new lower low than the forty four twenty three print that we saw on Sunday night into Monday morning. In fact, I think a retest of the fifty day moving average during regular trading hours is likely before this is over based on the way the tape looked at recording time. Again, that was before the European Open.

Sometimes th things take a turn in one direction or the other when Europe opens. So look at what uh the direction has been. I'll give you my number as I'm recording here is four nine four zero. Uh if it's gone substantially above that by the you know, early morning uh New York time on uh Thursday. Well, maybe we're seeing uh that the bottom really is in. If it's below the thirty eight point two percent level, which again is four eight eight two

on the f April contract, that would suggest that we're headed toward a retest of uh the overnight lows, which again were forty four twenty-three. I'll assign a thirty percent probability to a subscription. a substantially deeper correction well below the fifty day moving average, perhaps testing the one hundred day moving average at forty two hundred sixty three, that's four hundred two six three, or even lower if the US dollar rally continues in earnest.

And that leaves ten percent remaining for the unlikely scenario that we just power out of this after the market figures out that Kevin Walsh is going to give Trump whatever he wants, and we see new highs above fifty six hundred within the next few weeks. Again, that's an outlier, definitely not a prediction. But if that were to happen, it would be profoundly bullish looking forward because it would mean that the buyers are stepping in and buying the dip.

despite the emotional carnage that just happened to everybody with this washout that happened last Thursday morning as our editors were preparing the podcast. So assuming this is not that five percent end of the bull market signal, and I really don't think it is, this should be welcome news to long term bulls. I know it hurts.

As I've said repeatedly though in recent weeks, when markets go parabolic up, the more they go as quickly as gold was running, the more tail risk is created as a result of that parabolic rise. Consolidating for a few weeks and shaking off the overbought technicals to set the stage for the next leg higher should be seen as welcome news in the big picture, notwithstanding how gut wrenching this was for all of us long.

On a final note, for heaven's sakes, don't give any credence to all the knuckleheads on X crying about market manipulation. Of course, precious metals markets are manipulated, as are all markets, but this was a super easy to see coming technical correction in response to an extreme overbought technical setup.

That's why it was easy to see coming and that's why I've warned you about this exact scenario of a sharp correction to fill that gap at forty six hundred for the last two weeks in a row right here on this podcast. Now this one ran a hundred and seventy five dollars deeper than my call. You you can't predict these things exactly. But it ended so far at least with a perfect test of the fifty day moving average. So all of this is textbook technical analysis stuff.

No evil bullion bank conspiracy required to explain it or to predict it, as we did predict right here on Macro Voices. Well, Eric, the one thing that I really try to emphasize was uh that the parabolic moves uh always have short duration in terms of time and uh and uh correction was inevitable even if it could have come at from much higher levels.

Well, we got this correction. The thing here is that with gold having this deep of a correction, the one thing I would want to predict is is that now gold is going to be in a multi month consolidation. There's a very reasonable chance that the pr the low that was established here near forty five hundred is going to be uh the low.

And even if it temporarily broke to a lower low below forty five hundred, it's probably gonna be a short term trip down there. But likely the remainder of the first quarter is going to be gold absorbing and consolidating and basing from uh from this big parabolic move.

Uh and so I think that uh While dips can inevitably be bought on gold, I don't think that there's any rush or urgency to be putting on brand new gold positioning unless you're willing to grind it out for months waiting for the next turn up in the gold market.

All right, Eric, let's talk uranium. A lot has happened since last week's interview uh with Justin. How are how do you size this up? As regular listeners know from last week's feature interview with uranium insider editor Justin Hune, I couldn't possibly be more bullish on uranium long term.

But we took a beating this week and the reason was a sudden retreat in the spot price of uranium, which had briefly moved into backwardation, touching almost a hundred dollars, even as the long term contracting price was still in the high eighties. Now Justin's hypothesis and I agree is that what happened here is that Sput's big purchase of physical metal this past week was so widely broadcast and anticipated that more traders tried to front run it. then Sput actually had pounds to buy.

So imagine Sput needs to buy three million pounds, but a bunch of front runners buy ten million pounds, getting expecting that they're gonna be able to unload it on Sput They know that that date is coming. They front run it. That runs the price up to almost a hundred bucks.

But now there's guys that are selling ten million pounds and Sput's only buying three million pounds, the other t seven million get sold off. That takes us right back down to the low nineties, which is exactly what's happened. So that would explain why the price had been so strong in the prior week and why it sold back off so sharply.

after the bag holders got left uh holding that proverbial bag when there were more front runners selling than Sput had budget to buy. Now I just made the number up of, you know, ten million and seven million and so forth. The point is Everybody knew Sput had a big buy coming. Uh this was actually Justin's thinking, not mine, so I don't want to take credit for it.

His hypothesis is what happened here is more front runners than there was metal to buy and that resulted in this whipsaw and w we're now paying for it in terms of a move back down. But hey, it's another opportunity to shake off the overbought stochastics and RSI and that swing lower creates a buying opportunity.

I added to my Camico longs at one hundred ten spot eighty five on Wednesday. I was lucky enough to get filled just barely above the low of the day, but I won't be at all surprised to see a new lower low before this swing trade is over.

So this welcome pullback created both a buying opportunity and shook off the overbought technicals, clearing the way for the next move higher. And to be sure, even if gold is going to sell off further, It doesn't do anything to damage the fundamental case for uranium. Now what it does do is potentially create a contagion and a feedback loop because a lot of the same people own gold that own uranium.

So if they get massacred in the gold market and that could be coming next if there's a deeper correction, if we get into forced selling and uh margin call liquidations and so forth. you're going to see people selling uranium not because they want to, but because they have to, because they're covering margin calls on their non performing gold positions. So don't be surprised if we see more weakness in the uranium market if there is further weakness in the gold market.

Well, Eric, I uh agree that overall uranium should be bought on dip. We uh clearly have a very violent correction here. Uh they we're approaching some key Fibonacci retracement zones, so let's actually see whether it's bought on dip here or not. Uh if uh if this is going to continue to be bullish, then we are literally at levels where the bulls should be buying dips and um creating support.

So let's see whether that develops here over the next week. Finally, Eric, let's just touch on copper. Well Patrick I said last week that that gigantic big green candle on uh Wednesday as I was recording north of six dollars fifty cents. was super bullish on the condition that it lasted through a weekly close above six dollars. Well, needless to say, and unfortunately for the longs, that didn't happen, not even close.

So that bullish signal is negated and the chart, frankly, is starting to look kind of top heavy. I don't have any predictions, but I'll be watching Dr. Copper closely in coming weeks. Patrick, what are your thoughts? Well the one technical thing I wanna observe about Copper here, Eric. is that it's been on an intraday basis very correlated with gold. You know, it peaked out almost the same time as gold.

uh a rapid sell-off ended almost the same time as gold, put in a short term low. It bounced the same way at gold. Like why I'm not certain why copper is so correlated on the very short term. Maybe it is just a short term thing, but right now copper seems to have very much the same behavior as gold. And if if it continues And we do anticipate gold to be consolidating for months.

Will that also be the case for copper? It'll be very interesting to see. Patrick, before we wrap up this week's show, let's hit that 10 year treasury note chart. Yeah, finally on that 10 year treasury yield, I wanted to simply point that the bond markets have been so quiet. And when we ha see this kind of volatility in the intermarkets and see everything moving, including the dollar, including commodities, including the markets, uh, when will the bond markets react?

Uh I I'm uh shocked that they have been so quiet, but I don't think they will continue. If we see that uh there's equity risks and and all of these things are cracking, I think bond yields here have a legitimate chance to start moving.

Folks, if you enjoy Patrick's chart decks, you can get them every single day of the week with a free trial of Big Picture Trading. The details are on the last pages of the slide deck or just go to bigpictrading.com.

Patrick, tell'em what they can expect to find in this week's research roundup. Well, in this week's research roundup, you're gonna find the transcript for today's interview and the trade of the week chart book we just discussed here in the postgame, including a number of links to articles that we found interesting. You're gonna find this link and so much more in this week's research roundup.

So that does it for this week's episode. We appreciate all the feedback and support we get from our listeners, and we're always looking for suggestions on how we can make the program even better. Now for those of our listeners that write or blog about the markets,

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