David Hay — Group Non-Think
"Inventories will not rebuild gracefully. They may not rebuild at all." — the consensus that oil snaps back to $60–70 is wrong.
One-line take: A talking-points-led energy daily. Team Haymaker "vehemently disagrees" with the consensus that oil plunges back to $60–70 once Hormuz reopens. Cumulative lost supply is now ~1 billion barrels, heading to ~1.5 billion — even at a heroic 2 mb/d surplus it would take ~1.5 years to make up. Industrialized-country SPRs are dangerously low and (per Goehring & Rozencwajg) take years to refill (+1 mb/d through most of the decade), and nations like Pakistan are newly building reserves. So accumulate energy shares — and even oil itself — on weakness like the recent ceasefire-hope dip; a formal ceasefire could ease prices further into "an outstanding buying opportunity." Method: methodically dollar-cost-average the sector, focusing on names with 2-year breakouts that have settled back. APA Corp is "a good illustration."
1. Stocks & names mentioned
| Ticker | Name | Research | View | What he said | At |
|---|
| APA | APA Corp (Apache) | QT · SA · STK · FA | Positive | "A good illustration" of his energy-accumulation method: a 2-year breakout that has settled back and looks poised for longer-term range expansion. Dollar-cost-average energy on ceasefire-hope weakness — the lost-supply + SPR-replenishment thesis means oil doesn't snap back to $60–70. | read |
2. Talking points
Group Non-Think — the consensus is wrong
- Team Haymaker "vehemently disagrees" with the widespread belief that once Hormuz reopens, oil plunges back to $60–70. The crowd is anchored on a fast normalization that the supply math doesn't support.
~1 billion barrels lost, heading to ~1.5 billion
- Cumulative lost supply is now ~1 billion barrels, heading toward ~1.5 billion. Even assuming global production can run 2 mb/d above demand — a heroic assumption — it would take ~1.5 years to make up the lost output.
SPRs drawn dangerously low — years to refill
- Industrialized-country strategic reserves have been drawn to dangerously low levels. Per Goehring & Rozencwajg, replenishing global SPRs takes several years (+1 mb/d of demand through most of the decade), and nations like Pakistan are newly building reserves.
- G&R: "Gulf supply will return to a system that was quickly tightening, that is now starved of inventory… Inventories will not rebuild gracefully. They may not rebuild at all."
The action — accumulate energy on weakness
- Accumulate energy shares (and even oil itself) on weakness like the recent ceasefire-hope dip. A formal ceasefire could ease prices further — which would be an outstanding buying opportunity.
The method — dollar-cost-average the 2-year breakouts
- Best method: methodically dollar-cost-average into the sector given extreme volatility, focusing on names with 2-year breakouts that have settled back and look poised for longer-term range expansion. APA Corp is a good illustration.
3. In plain English
APA — APA Corp (Apache) Positive
APA (formerly Apache) is an oil producer Hay uses as the example for how to play his energy view. His big-picture point: everyone assumes oil falls back to $60–70 the moment the Strait of Hormuz reopens, but he thinks that's wrong — about a billion barrels of supply have already been lost (heading to ~1.5 billion), strategic reserves are near-empty, and refilling all of it takes years. So oil should stay higher and tighter than the crowd expects.
How to act on it: rather than buy energy stocks in one shot — they're very volatile — he buys a little at a time (dollar-cost-averaging) on dips, especially when ceasefire hopes knock prices down. And he targets names that already broke out to multi-year highs and have since "settled back," because those tend to be coiled for the next leg up. APA is his illustration of that kind of name. The takeaway is the method (average into pulled-back energy breakouts) more than a hard buy rating on APA specifically.
Summary & excerpts derived from the paid Haymaker Substack post (saved text in transcript.txt) for personal study. Not investment advice. © Haymaker / David Hay for source material.