🗞 Oil Stocks: 3 Massive Upside Plays I'm Watching (And Why)

WHILE YOU POUR THE JOE… ☕️

The Fed just cut rates this month, yet mortgage rates are up? 📈 

Makes no sense, I know, until you realize what’s actually happening here.

First of all, the Fed cut into 3% inflation and 1.4% real rates, as we already broke down in a previous newsletter.

Historically, this is bullish for real assets (like silver and gold) but bearish for financial assets. 🐻 

Like mortgages.

Why?

As real asset valuations rise, including real estate, there must be a floor between current prices and even higher ones.

That’s where mortgage rates come into play: they rise to keep prices in check (but they don't).

Now that the world’s bond traders are betting on no more cuts into 2026, things are turning bullish for a few other asset classes.

One of them is art, and crowdfunding for art pieces is one way to escape this current theme, so let me help you skip the waitlist below, thanks to today’s sponsor.

Speaking of turning bullish, let’s get on with today’s email 📧…

DRILL BABY DRILL
First Time Ever

For the first time in history, silver prices are now above the price of oil.

That’s not necessarily crazy, as these are two subjective commodities.

However,

On a performative basis, silver has outperformed oil since 2022, and that’s a very important period of time for the United States economy. 👀 

Since 2022, the services sector of the economy (roughly 88% of GDP) has softened alongside business activity, raising the risk of a GDP contraction.

Considering that manufacturing hasn’t been doing well either, contracting for over 28 months, the economy has been mostly carried by services and consumer activity.

Now here’s the problem:

Even consumers are beginning to feel the pain, as sentiment falls to bottom-range levels, driven more by concerns about lower incomes than by price pressures.

With all three legs of the economy suffering right now, it’s hard to be bullish short-term away from some of the premium stock set-ups I have sent over to my Deal Room members.

As hard as it is to be a bull, I think oil could be on the brink of a major shift.

From the Commitment of Traders (CoT) report, we can deduce the following:

• Commercial Positioning: Been piling up toward a net long position after accelerating in late 2021

• Speculative Positioning: Seeing the opposite from the commercial side starting in 2022 as well

This sudden acceleration has to do with where the economy is now, as less economic activity and GDP growth potential directly affects oil demand (and its price).

So how does all this change?

The oil industry overall sees a major change happening in 2026, and I believe this has to do with one big theme that’s around the corner.

A rally in the $DXY dollar index. 📈 

• Bond traders around the world have been betting on no more rate cuts from major G7 economies

• .Dollar shorts are piled up to levels not seen since 2014

• Manufacturing and exporting activity needs to be stimulated after the 28-month-long contractions

Here’s how a bull case in the dollar can help oil (yes, I know how counterintuitive this sounds, but bear with me).

If no more rate cuts come, that’s fine for business activity, considering services inflation is still high (65.4% on the PMI) on top of real rates still hovering around 1.4% right now.

This gives the services sector more than enough room to operate freely and still meet its investment / capex obligations moving forward.

But here’s the best part,

Correlations between the dollar and crude oil have been trending up for the past four years.

Due to real economic factors, such as the lifting of production and export bans, this relationship is likely to continue.

Especially if bans on Russian / Chinese oil markets stand with the way Trump has been handling this geopolitical situation.

Anyway, I think it’s time (proven economically and statistically) to consider looking into some bullish setups and outliers inside the world of oil stocks.

These are the outlier industries in which I want to start drilling for long ideas:

• Drilling

• Mechanical & Equipment

• Refining & Marketing

The reason is that they all trade at a premium forward P/E multiple, justified by their above-average EPS growth expectations, giving them a very attractive (and reasonable) PEG ratio.

That said, we can use the same methodology inside the stock selection process.

The same process getting our Deal Room members results like these in one single play (like Chipotle) ⬇️ 

Anyway, let’s screen for the following inside those industries for our oil and gas long ideas.

Here’s what looks interesting to me so far: ⬇️ 

PBF Energy (PBF) is a $3 billion company trading well below 70% of its 52-week high, so to me, most of the bearish oil case must be already priced into today’s price.

Leaving you (and me) with plenty of asymmetrical upside.

The reason I have this one outlined as a potential long is simple:

• Forward P/E premium of 24.2x vs the peer average of 8.0x

• EPS growth forecasts of 121.4% vs the peer average of 27.9%

• PEG ratio of 0.2x vs the peer average of 0.4x

While there are surely more fundamental reasons, these are enough to justify digging a little further into the company.

Also keeping Names like Total Energies (TTE) and Equinor (EQNR) in mind as potential shorts to hedge out this long idea.

Now for drilling, let’s use the same methodology here and pick out some long outliers.

So far we have:

• Helmerich & Payne (HP)

• Transocean (RIG)

You know the drill: premium valuations and above-average EPS growth, reasonable PEGs.

Last but not least, my outlier for the mechanical & equipment industry goes to Solaris Energy Infrastructure (SEI).

Forward P/E premium, above-average EPS growth forecasts, and an attractive PEG ratio.

Now you have the list and a pretty good reason to have oil names on your radar right now.

But,

That’s only half the battle, as we must now go deeper into these companies and find the right hedges for them in case we’re wrong in our take.

You can do this on your own, or you can access all of my research, including:

• Entire financial / valuation models

• Industry / Company deep dives a la Goldman Sachs

• Live trade and portfolio management

It’s like having an institution right in your pocket, at a fraction of the cost.

And the best part?

It’s free for 7 Days, so you can try us out at no risk to you. Most members end up 10X’ing their membership fee before it’s even due.

So make the choice that can significantly change your financial future today,

Join the InvestiBrew Deal Room. ✅ 

To your success,

G 🫰