Sunday Edition: The Last Oil Rally? Why 2025 Could Mark the Energy Tipping Point

Oil just spiked—but don’t get comfortable. Behind the headlines, global demand is fading fast. In this Sunday Edition, GAR Capital breaks down why this might be the final energy rally before the decline begins. Stay sharp, stay tactical… and stay five steps ahead.

🛢️ The Last Boom?

Why the Recent Energy Spike May Be the Canary in the Coal Mine

Last week, we told readers to watch crude oil like a hawk.

With WTI stuck in the low $60s, OPEC budget stress was mounting. Hedge funds jumped into energy stocks for the first time in years, giving the sector a quick bounce.

But don’t confuse a bounce with a bull market.

This may be the final rotation into traditional energy before the long-term decline sets in. It's not about war. It's not about supply. It’s about something far more important: Demand.

And the world is losing interest.

📉 Crude Weakness Isn’t About OPEC Anymore

This isn't a classic oversupply issue. OPEC+ has slashed production repeatedly. Yet prices remain stuck.

Why?

Because demand is quietly collapsing.

From cargo shipping to power generation, global energy consumption is weakening. Even amid Middle East flare-ups and Red Sea chokepoints, crude can't stay above $70. Without those headlines, we’d likely be looking at mid-$50s.

This is no longer about short-term price action—this is a macro pivot.

🧠 The Real Cost of an Oil-Based Economy

As investors chase yields and value in energy names, they’re ignoring the structural writing on the wall: Petroleum Engineering = Sunset Industry

Top-tier universities are producing fewer graduates in the field. Why study a dying sector?

Brain Drain in Progress

The best minds are moving to climate tech, software, or AI. Innovation in oil is stagnating.

Jobs on the Line

Drillers, rig operators, refiners—high-paying jobs are disappearing quietly and consistently. This isn’t just about prices. It’s a looming labor and productivity shock.

📉 Demand Destruction = Repricing

Let’s say peace breaks out, sanctions drop, and Iranian/Russian oil floods back into markets.

With demand still flatlining?

• Oil prices collapse
• Energy stocks get repriced lower
• Margins implode for refiners, midstream, and drillers
• Capital exits just as fast as it entered
• This isn’t a breakout—it’s a trapdoor.

⚠️ Energy as a Tactical Trade, Not a Strategic Allocation

Sure, Exxon (XOM) trades at 15x earnings. Chevron (CVX) yields 4.5%. But these aren’t reliable long-term plays if demand continues to deteriorate.

Buying energy today is like buying newspapers in 2002 because they looked "cheap."

If you trade it, trade it tactically. Don't marry it.

🪦 Peak Oil Demand = Peak Headcount

Oil is no longer scarce. And when a product is abundant while demand disappears—that’s liquidation mode, not investment opportunity.

• Job listings across the sector are falling
• Capex is shrinking
• Institutional capital is rotating in, only to likely rotate out just as fast
• The professionals know: leave before the lights turn off.

🧠 Five Steps Ahead

At GAR Capital, we don’t just follow trends—we anticipate the future.

This energy rally might look tempting. But in our view, it’s a setup for something far worse: a long-term breakdown. Watch price. Watch flow. But most of all, watch demand.

If demand doesn't return, none of it matters. Trade smarter. Stay five steps ahead. Stay GAR.

📉 Bonus Macro Signal: The Dollar’s Breaking Point

While everyone’s watching oil, don’t forget the macro giant: the U.S. Dollar Index ($DXY).

Right now, $DXY is sitting on its 100-month moving average, clinging to a decades-long support trendline. If that breaks?

Brace for impact:

Commodities explode—not from real demand, but from currency devaluation Bond yields may drop, but consumer purchasing power craters Inflation spikes, and the Fed gets trapped between credibility and control Middle-income households get hit hardest—rising import costs, shrinking real wages, and no easy policy fix.

For oil? It might spike temporarily… but for the wrong reasons.

⚠️ Final Note:

“If the dollar dies slowly, oil becomes expensive. But if demand dies faster than the dollar, it’s a bull trap in disguise.” That’s the real danger: confusing short-term price spikes for long-term opportunity.

We’re not here to chase. We’re here to lead.

🎓 Want to Think Like This?

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