The last time US oil production peaked, nobody believed it.

This time, the signs are just as clear and most still don’t want to see them.

(Thread) In 1956, geologist M. King Hubbert modeled how oil production in any given field peaks once ~50% of its reserves are depleted.

He predicted US conventional oil would peak in the late 60s/early 70s.

He was ridiculed.

The AI revolution copied the circular-financing model of the dot-com bubble.

- Same model.
- Different technology.
- Much bigger scale.

When the bubble bursts they will get a bailout, while you will pay the bill

(Thread) Vendor financing: dot-com edition

- Equipment vendors, like Lucent, realized telecom startups had no money.
- they loaned them the money to buy their equipment.
- These loans were booked as “sales” -> revenue surged
- Accounts receivable exploded

Customers defaulted -> vendors wrote down billions -> crash

Gold’s rally turned skeptics into believers.

But the big money was made years ago, when gold was dead.

That's where oil is today... hated, ignored, under-owned.

That’s where fortunes are made.

(Thread) Gold had an insane year:

- Up 44% YTD
- Biggest annual gain since 1979

A few years ago, no one cared. Gold was dismissed as a relic.

But those who bought when sentiment was dead were rewarded with stellar returns.

Shale oil doubled global decline rates.

Every year the world now loses the equivalent of Iraq’s entire oil output, the 4th largest producer, just to stay flat.

This treadmill can’t run forever.

(Thread) Difference between conventional and shale oil

- Conventional wells tap into big underground reservoirs.
- Once drilled oil flows naturally for decades.
- Peaks after 5-17 years
- Declines ~5% per year

They ramp up slowly, decline gradually

Shale growth is collapsing.

Output growth is down 90% in just 2 years.

Every basin except the Permian has already peaked.

Now the Permian is flashing the same warning signs.

(Thread) The shale story is a story of 3 major basins:

1) Permian -> 60% of US shale production
2) Eagle Ford -> ~15–20%
3) Bakken -> ~10–15%

The Permian is the big boy here

Everyone wants to chase hype.

But the biggest returns are made in industries nobody wants to touch.

The next 10 years won’t be about AI or crypto.

They’ll be about commodities.

(Thread) When commodity prices collapse, nobody wants to invest.

- Producers go bankrupt
- Supply shrinks
- Analysts stop covering the sector
- Capital dries up completely

This is the bear phase of the commodity cycle, where patience is required.

The Permian isn't a oil basin... it's a water basin.

For every barrel of oil in the Permian, 4–12 barrels of water come up with it.

It’s not just a water problem... it’s a clear sign of shale’s looming doom.

(Thread) A rising WOR (water-oil ratio) and GOR (gas-oil ratio) are textbook signs of reservoir depletion.

Shale is showing both.

https://twitter.com/1554189979462557696/status/1952256262835503360