🗞 A 60% Upside Play in Energy: So Good You Can Almost Taste It

BREAKING THE DEAL
Dollars & Barrels, Where You Should Be

 Something weird is happening in the commodity markets, and my guess is most of you have already heard about this on Twitter and other spaces. The price of silver (per ounce) is now above the price of a barrel of oil, but that’s not really indicative of much, considering these two are subjective commodities.

But when you compare the two, silver has been negatively correlated with oil since mid-2022. Here’s where things get interesting: Since 2022, major economic indicators like the Services PMI index (~85% of GDP) have softened along with a steady decline in the price of oil, showing you the broader consensus for slower economic activity and growth.

This matters because correlations between the dollar and crude oil have also moved into positive territory since 2019, accelerating in 2024 and reaching 40%+ correlations. While that may sound counterintuitive, keep in mind that a Trump administration is pro-domestic production, anti-oil production bans, and supportive of dollar supremacy.

So, with metals like gold and silver breaking out and leaving oil behind, the stage is set for a rotation back into economic growth-led commodities like oil, as long as the dollar goes up again. 📈 

Given that bond markets are signaling a lower and lower likelihood of future rate cuts across G7 nations, and that all current cuts are already priced in, I think it's time to start betting on this rotation.

Among most energy stocks, I’ve found a tremendously attractive opportunity in a $3 billion company, whose net asset value alone is worth upwards of $9 billion, so you can start to imagine the sort of upside that’s expected out of this play, plus a few other factors:

-          A Forward P/E premium vs peers

-          Massive buyback programs are happening right now

-          Over $200 million of institutional buying activity this quarter

With volatility beginning to top, and a major order flow level about to be reached as significant support for the stock, this is how a single well-chosen stock can change your entire year into 2026 ⬇️ 

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