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The Beginning Of A Huge Oil Bull Market

VRIC Media Jul 9, 2026

Summary

Josh Young argues a multi-year oil bull market is already underway, driven by falling US shale productivity and rising production costs.

Shale wells deliver less oil per lateral foot each year, forcing drillers into longer laterals and more frack stages for the same output.

Strategic reserve sales were loans rather than gifts, so commercial buyers must return more oil when refills start around Q3 2027.

The IEA's superglut forecasts have missed every year since 2023, which puts the burden of proof back on the forecasters.

He prefers misunderstood small producers and cheap onshore services over pricey midstream and offshore drillers, and sees gas upside if oil holds.

Darrell Thomas's takeaways

  • Top takeaway He presses the inventory question as the bull case's main test: if there were really an oil glut, strategic reserves would not be drawing down, and he adds that commercial inventories are being drawn globally too, which makes the glut story look inconsistent.
  • He asks whether the large strategic petroleum reserve drawdowns in the US and China are effectively a non-event or a meaningful factor for the oil price, inviting an answer on how supply should be counted.
  • On his own positioning, he says he was actively invested in offshore drillers and producers, has not touched that part of the sector in quite some time, and only dabbles in oilfield services names such as Schlumberger and Halliburton.

Josh Young's takeaways

  • Top takeaway The guest calls the current market the early-to-mid stage of a multi-year oil bull market that began around COVID, and treats the ongoing Iran conflict as a sideshow to the larger structural story; he notes WTI fell from about $107 in mid-May to a recent low near $67, which he describes as almost a 50% correction, with oil up about 5% on the day of recording.
  • His structural drivers are rolling over US shale productivity per foot, forcing more lateral feet, longer laterals and more frac stages for less output, plus existing discoveries running thin, average production costs rising despite company efforts, and disappointing new discovery counts every year.
  • He argues the US strategic reserve sales were loans rather than permanent supply loss: commercial buyers must repurchase starting around Q3 2027, with roughly 20% more oil than was withdrawn, which he sees as structurally bullish even though the release itself was short-term bearish.
  • He says the IEA's superglut forecasts have been wrong every year since 2023, calls the agency's roughly 5.5 million barrels a day 2027 glut forecast spectacular in light of that record, and notes January and February of this year showed small global inventory draws rather than the expected builds; his bet is that 2027 is not the agency's year either.
  • His preferred exposure is small onshore oil producers, especially those with mis-modelled asset retirement obligations or oil, gas and NGL mixes, plus cheap onshore drilling and services companies he sees as needing more activity just to hold production flat; he is wary of pricey midstream and downstream names and of offshore drillers locked into mediocre multi-year contracts, and expects onshore services could rerate well above their current low multiples of book.