Preparing for a Crude October Surprise

Are you prepared for the October surprise? They have a long, rich history in our election cycle.

In 2020, it was Hunter Biden’s laptop breaking into every headline that hit our eyes. Four years earlier, even the younger members of our investment community will remember the Access Hollywood tape, or even later that month when it was Hilary Clinton’s emails that caused an uproar.

Yet here we are just thirteen short days until we can finally rid ourselves of the most dreaded year in American politics; less than two weeks until the four-year countdown begins for the next shitshow, just waiting for this election’s surprise.

I hope you enjoyed the show.

But hey, we should take our hats off to whoever has kept a lid on crude prices. That’s a feat I honestly didn’t think was possible. Even today as WTI crude prices strain to breathe above $70 per barrel, there’s a foreboding sense of bullishness in the air.

Let’s face it, the entire market is waiting with bated breath for Israel’s next move.

They wait, and wait… and wait.

Is World War III on your bingo card for the October surprise this year?

Let’s hope not.

One thing I’ve learned over the past year is that if someone tells you they know with certainty what Israel’s next response will be, then you know they’re full of something.

Even as you read this now, Secretary of State Antony Blinken is making a plea for peace in the Middle East. The last thing one side wants is for a juicy oil price spike to strike so close to this contentious election.

If I were a betting man, I wouldn’t put money on Blinken succeeding. Call me a pessimist if you want, but this entire conflict feels more likely to escalate than fizzle.

However, whether or not the Israelis still plan on hitting Iran’s oil facilities is up in the air. Forget the Hormuz strait, dear reader, and keep in mind that roughly 90% of Iran’s crude exports flow through a tiny rock off its coast called Kharg Island.

But what’s really interesting to me is the amount of skepticism over such a strike, as if it isn’t even on the table any longer.

Only time will tell on that one.

Instead, we should be focusing on other, fundamental catalysts that’ll drive crude prices one way or the other.

And for that, we just need to look at the supply side of the situation.

For all the bearish headlines over oil these days — be it concerns over China’s growth or overly hyped predictions of a ceasefire in the Middle East — I find it odd that you rarely hear about the fact that global oil demand is not only at record highs, but will soon eclipse 104 million barrels per day.

If oil’s dismal trading range continues, you can bet the OPEC+ alliance will delay putting more oil back on the market.

That leaves us with just a few options… and you may not like your choices.

You see, 80% of non-OPEC supply growth is expected to come from just four countries: Guyana, Canada, Brazil, and the United States. And while U.S. output may rise a little to around 13.4 million barrels per day in the coming weeks and months, it certainly won’t be as much as most expect.

Remember, the days of the oil gushers are long gone. Today’s oil fields focus on just two things: Cutting costs and increasing efficiencies.

That’s it.

And when the world is counting on the U.S. to shoulder most of that supply growth, things may get a lot tighter than the projections are showing — especially when record demand is on the table.

Of course, that simply makes the little-known oil investment gems THAT much more valuable.

This is something you truly have to see for yourself.