Kontrarian Korner #55 - HFI Research

Yesterday I had Wilson from HFI Research back on the podcast to discuss everything going on lately when it comes to oil. We talked about OPEC, Capex cuts in the Permian, and how he expects the next couple years will play out in the energy space. If you are listening on Apple Podcasts or Spotify, you might want to switch over to Substack or YouTube so you can see the charts on the video. You can find HFI Research on Substack below, but you can also find him on Twitter.

Podcast Summary

* The recent news from OPEC, and why the production cut that is now being unwound was really a Saudi production cut, not an OPEC cut.

* Why the OPEC production boost doesn’t signal an incoming price war.

* The disconnect between the narrative and reality when it comes to OPEC.

* How tariff and macro uncertainty factor into the perception of oil demand for the rest of 2025.

* How OPEC is forcing the inevitable, and why he thinks non-OPEC oil supply will disappoint to the downside moving forward.

* Capex cuts in the Permian due to lower oil prices, and the disconnect between consensus US production vs. the HFI estimates.

* Why he thinks we will see more Capex cuts in the Permian in coming months, especially if oil sits around $60 a barrel.

* How all of this leads to a structural supply deficit for oil from 2026 and beyond.

* The timing problem when it comes to buying energy equities and the disconnect between the fundamentals and the narrative when it comes to oil.

* Why $70 a barrel was the worst case scenario for shale operators.

* Why we could see more M&A in the Permian.

* His view on tariff and trade deal negotiations, and why he doesn’t see a quick resolution.

* His view on Iranian sanctions, and why they won’t be effective.

* The Strategic Petroleum Reserve being filled up and why logistical issues mean it will take a long time to refill.

* Why natural gas will be the first energy commodity to go into a bull market, and why he thinks we could see a spike in natural gas this summer.

* Potential scenarios where the US might have to shut in LNG export capacity in 2026.

* What he prioritizes when he is looking at natural gas equities: the lowest cost producers, and producers that are not as hedged.

* His thoughts on the challenges of entrepreneurship.

* Book Recommendations: The Nvidia Way by Tae Kim, Source Code by Bill Gates & Shoe Dog by Phil Knight.

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