Recorded on: June 29, 2026 Jesse Felder highlights a striking divergence in oil markets: physical inventories, including the Strategic Petroleum Reserve, have plunged to multi-decade lows while demand hits records, yet institutional investors hold the most bearish positioning ever. This contrarian setup is amplified by the AI frenzy, which has drained interest from energy—despite the sector’s strong five-year performance. Insider buying in exploration and production (E&P) companies and an absence of commercial hedging signal confidence in sustainably higher prices. Felder argues that a decade of underinvestment due to capital flowing elsewhere, first to shale, then to ESG, now to AI has constrained supply, laying the groundwork for an oil supercycle targeting $120/barrel. Turning to gold, Felder notes that a needed correction has brought prices back toward levels suggested by real rates, with speculative froth easing. A pivot from the Federal Reserve toward rate cuts—should economic weakness emerge—could reignite a bull run. He warns that new Fed Chair Warsh’s attempt to walk back dovish policies and market handholding may be thwarted by the economy’s immense dependence on asset prices and record margin debt, which, as a share of M2, now rivals March 2000 extremes. The AI-driven equity rally is increasingly fragile. The Magnificent Seven’s once-dominant moats have eroded as they compete in overlapping fields, while free cash flows for hyperscalers have evaporated. The emergence of open-source Chinese AI models—offering comparable performance at a tiny fraction of the cost—threatens to slash demand for expensive compute. With training still accounting for most chip spending, any pullback in frontier model development could collapse semiconductor demand just as South Korea plans massive new supply. This dispersion and leverage echo past speculative peaks. To navigate these cross-currents, Felder emphasizes broad diversification, adding real assets, energy, and precious metals to traditional portfolios. Tactically leaning into out-of-favor areas with strong fundamental stories can provide resilience as the capital cycle rotates away from the most overcrowded trades. Timestamps: 00:00:00 - Introduction 00:00:46 - Iran War and Oil Markets 00:04:20 - Gold Leading Commodity Prices 00:05:50 - SPR Refilling and Demand 00:12:47 - OPEC Supply Dynamics 00:18:57 - Attractive E&P Companies 00:21:53 - Precious Metals and Gold Outlook 00:26:29 - Fed Policy and Inflation Risks 00:36:25 - MAG7 and AI Profitability 00:43:35 - Cost of Compute & Open Models 00:49:05 - AI Bubble Popping 00:52:20 - Semis & Korea Performance 00:53:30 - Safer Investing 00:56:40 - Concluding Thoughts
