Kontrarian Korner

Today I’m excited to publish the first part of a podcast series on oil that I will be doing over the next couple weeks. Rob Connors, the author of The Crude Chronicles, joined me for part 1 to give us a historical look at where we are in the cycle today. He also provided a detailed slide deck that we went through, which I included below. If you want to follow him on Twitter, he also shares some of his interesting charts there.

Podcast Summary

* Why he thinks energy could be one of the best (if not the best) performing sector of the S&P 500 over the next decade, and could return 9-10% AFTER inflation.

* The two main drivers for commodities cycles: liquidity or excessive money creation, and declining well productivity.

* The six stages of the oil cycle, and why we are in stage 3 now.

* How the incentive structures have changed for E&P management and what that means moving forward.

* His thoughts on the political changes and why “Drill, baby, drill” won’t have a huge impact.

* Why he thinks the floor for oil is somewhere in the low-60s.

* Oil bull markets typically have three waves, and why offshore oilfield services typically perform best in the third wave.

* His thoughts on the narrative around OPEC spare capacity, and why he is more focused on non-OPEC supply.

* Book Recommendations: Can’t Deny It by Doug Terreson, The Prize by Daniel Yergin, and The Quest For Value by Bennett Stewart.

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