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Adam Rosenwag warns US shale production peaked in October 2024

Monday, May 25, 2026 · from 2 podcasts
Peter St Onge PodcastMacro Voices
  • US shale oil production peaked in October 2024, removing the world’s primary source of new supply.
  • The IEA forecasts a surplus, but flat global inventories suggest demand is higher than reported.
  • Oil is the most hated asset class, with energy stocks at 2.3% of the S&P versus a long-term 12-14% average.

The consensus view is wrong. Adam Rosenwag argues on Macro Voices that the market's dismissal of oil as a relic ignores a geological reality: U.S. shale, the engine of global supply growth for 15 years, peaked in October 2024 and is now rolling over.

His thesis hinges on contradictory data. The IEA forecasts a surplus, but global oil inventories remain flat - a sign demand is higher than official figures admit. The production cliff mirrors the North Sea peak in 2003 and the U.S. conventional peak in 1970, both of which preceded massive price surges.

"Oil is currently the most hated asset class in the world. Sentiment has reached COVID-era lows despite balanced physical fundamentals."

- Adam Rosenwag, Macro Voices

Peter St Onge, on his podcast, provides a contrasting view of recent American resilience. He notes U.S. production surged by 4 million barrels daily, exports nearly doubled to 8 million barrels, and revenue grew from $100 billion to $300 billion. This surge, combined with reduced Chinese demand, offset the bulk of a recent supply shock from the Strait of Hormuz.

St Onge warns the reprieve is temporary, as global reserves drop by 3 million barrels a day. Rosenwag contends the long-term bull case is structural, arguing energy stocks now make up just 2.3% of the S&P 500 versus a historical average of 12-14% - a valuation disconnect reminiscent of gold being labeled a barbarous relic before its 1999 bull run.

The surprise isn’t political disruption, but geological exhaustion. The shale supply cliff has arrived.

#Energy#Markets#Macro
IEA

Source Intelligence

- Deep dive into what was said in the episodes

Peter St Onge Podcast
Peter St Onge Podcast

Ep 174 Weekly Roundup: American Oil Saves the World • May 25

  • American oil production increased by 4 million barrels per day in weeks, nearly doubling exports to over 8 million barrels.
  • Increased US production and Chinese demand destruction replaced nearly 75% of the oil supply shock from the Hormuz closure, preventing a global shortage.
  • US oil export revenue grew from $100 billion pre-war to nearly $300 billion, making it larger than agricultural exports.
  • Tech layoffs average 30,000 per month, while Wall Street layoffs are roughly 20,000 per month.
Also from this episode: (9)

Big Tech (1)

  • Meta cut 8,000 jobs, mostly cancelled roles, with only 2,000 actual layoffs, while investing heavily in AI.

Labor (4)

  • Healthcare, skilled trades, energy, logistics, and AI infrastructure are growing sectors, while personal services dominate for low-skill workers.
  • There are 7.2 million NEET men (Not in Education, Employment, or Training), comprising 1 in 8 young men.
  • Men lost 142,000 jobs in the past 12 months while women gained 300,000. Over the past two years, two-thirds of all new jobs went to women.
  • A Journal of Political Economy study found NEET men spend 70% of their time playing video games, with two-thirds relying on welfare.

Immigration (3)

  • A Center for Immigration Statistics study found 47% of immigrant households use welfare programs, with usage rates varying by origin from 19% (Canada) to over 80% (Afghanistan, Somalia).
  • Federation for American Immigration Reform estimates illegal immigrants cost $150 billion annually in welfare, receiving six times more benefits than they pay in taxes.
  • The Hart-Celler Act of 1965 shifted US immigration from skills-based quotas to family reunification, increasing annual legal migration from 200,000 to over 1 million.

Politics (1)

  • Princeton and Northwestern researchers analyzed 1,700 policy issues and found voter preferences have zero influence on lawmaking, concluding the US operates as an oligarchy.
#Energy#Macro#Labor#Agents#Regulation
Macro Voices
Macro Voices

MacroVoices #533 Morgan Downey: The Return of Oil 101 • May 21

  • Adam Rosenwag argues the gold bull market is not over, citing its unique market structure where central banks are price-insensitive buyers and mine supply is price-sensitive and declining, with global above-ground stocks representing 100 years of cover.
  • Rosenwag says central bank buying, driven by a desire to escape dollar exposure after the US froze Russian Treasury assets, is a key inelastic driver of gold demand. He does not believe emerging market central banks have bought enough to meet Western reserve standards.
  • He states that Western speculative investment in gold is nowhere near past cycle peaks, meaning a major source of finicky, momentum-driven supply is not yet a threat to the bull market.
  • Rosenwag notes gold valuation is mixed: expensive relative to US housing or a GDP basket, but historically cheap relative to financial assets like the Dow, with the Dow/Gold ratio at 46,590 to 4,098 versus historical lows of 1:1 or 2:1.
  • He observes that major commodity bear markets typically end with shifts in the global monetary system, citing the end of the pre-WWI gold standard in 1928, the end of Bretton Woods in 1971, and the Asian currency crisis in the 1990s as historical precedents.
  • Rosenwag calls oil the most hated asset class, with oil and gas at roughly 2.3% of the S&P 500 versus a long-term average of 12-14%, drawing a parallel to gold being labeled a 'barbarous relic' in 1999 before its bull run.
  • He contends the IEA's forecast of a 1.5 million barrel per day oil surplus is wrong, as the implied inventory build is not materializing, suggesting demand is understated and the market is roughly balanced.
  • Rosenwag argues US shale production, the sole source of non-OPEC growth for 15 years, has rolled over since October 2024, predicting a sustained decline that will drive a major bull market as seen after prior production peaks in 1970 and 2003.
  • He explains oil's term structure (contango/backwardation) is an arbitrage reflecting storage costs and convenience yield, not a price predictor. A current shift toward contango reflects slightly higher inventories, not his long-term bullish view.
  • Rosenwag states the uranium market has been in a primary deficit for years, masked by the drawdown of Japanese stockpiles post-Fukushima, which are now depleted, creating a tight fundamental backdrop.
  • He notes hedge fund activity distorted the uranium market in 2023-2024 via the Sprott Physical Uranium Trust (SPUT), but that dynamic has unwound, leaving a cleaner market poised for gradual price increases.
  • Rosenwag believes new uranium mine supply is unlikely before 2030 due to permitting and lead times, and that reactor fuel demand is highly inelastic, allowing prices to rise significantly without destroying demand.
  • He argues AI-driven power demand over the next 5-10 years will be met primarily by natural gas, not uranium, making gas the immediate beneficiary while nuclear builds out for the 2030s.
  • Patrick Ceresna highlights the United States 12 Month Natural Gas Fund (UNL) as a better vehicle than the front-month UNG for capturing a long-term natural gas thesis, as its laddered structure reduces negative roll yield in a contangoed market.
  • Eric Townsend views the US announcement to release 19,000 metric tons of weapons-grade plutonium for advanced reactor fuel as a major policy shift that could avert a HALEU fuel crunch and redefine nuclear energy, signaling reform under Energy Secretary Steve Bessant.
#Macro#Energy#Markets#Inflation#Mining

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