"I like to say show me the glut... if you're having to scrape the data to find evidence of this oil supply glut, it's not an oil supply glut." - Jeff Currie (On the inaccuracy of current market surplus theories) 00:00:19"We called this the revenge of the old economy and it's a rotation out of the new economy tech... into the old economy which is asset heavy." - Jeff Currie (On the shifting investment landscape) 00:03:50
- (On the physical limitations of the boom)
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"These internet guys weren't putting steel in the ground. These AI guys this time around they're putting steel in the ground and they're going to hit those constraints."
In this Bloomberg Television interview, Jeff Currie of Carlyle Group argues that the widely reported oil supply glut is a myth and that the global economy is entering a new commodity super cycle. The core thesis, described as the "Revenge of the Old Economy," suggests a violent rotation of capital from "asset-light" sectors like AI and software into "asset-heavy" physical infrastructure. Currie emphasizes that structural underinvestment in refineries, copper mines, and energy will keep markets tight as AI development forces tech giants to put "steel in the ground."
Key Takeaways
The Invisible Glut: High-frequency data shows substantial inventory draws, contradicting the 18-month narrative of an oil oversupply. 00:00:19
Sanctioned Supply: Much of the "oil at sea" often cited as a glut is sanctioned oil that cannot be legally traded or touched. 00:00:43
Structural Underinvestment: There is a critical lack of investment in the "old economy," specifically in refineries and copper mines, with the last non-OPEC supply surge ending this year. 00:01:46
Geopolitical Hoarding: Nations including China, India, and the U.S. (via the proposed "Vault") are actively hoarding physical commodities due to structural shortages. 00:03:27
AI's Physical Demand: Unlike the software booms of the past, the AI revolution requires massive physical resources, including copper for the grid and natural gas for power. 00:05:15
Capital Rotation: Investors are shifting from the NASDAQ to energy and metals, resulting in a performance swing exceeding 30%. 00:04:12
Detailed Summary by Topic
1. Debunking the Supply Glut
Currie challenges the "apparent" supply glut, stating that if one has to "scrape the data" to find evidence, it isn't a real glut. He notes that high-frequency data shows inventory draws rather than builds. He highlights that a massive short position of 230 million barrels at the end of last year had a larger impact on market sentiment than any actual physical oil surplus. 00:01:07
2. The Revenge of the Old Economy
The interview defines a shift from "asset-light" (new economy/tech) to "asset-heavy" (old economy/commodities). Currie argues that the market has not seen significant investment in this space since the 2002-2012 period. As supply constraints hit, capital must rotate back into these foundational industries to support global growth. 00:03:50
3. AI and Infrastructure Constraints
Hyperscalers (major cloud providers) are moving from software-only models to building massive data centers. This requires a literal "pull" on the old economy for steel, copper for power grids and transformers, and natural gas for electricity generation. Currie predicts these tech companies will soon hit hard physical supply constraints. 00:05:39
4. Historical Parallels to the .com Era
Currie compares the current market to 2001-2004. He notes that the end of the internet boom saw a violent rotation into commodities. He points to Super Bowl advertisements as a sentiment indicator, contrasting the Pets.com era with today’s AI-saturated marketing, suggesting the peak of the "new economy" cycle may be near. 00:06:57
Data & Figures
Data Point
Value
Context
Market Short Position
230 million barrels
Size of the short position at the end of last year 00:01:07
Copper Price
$13,000 per ton
Current price level indicating a structural shortage 00:03:05
The Sledgehammer Metaphor: Currie explains that real gluts are obvious and "hit you over the head like a sledgehammer," unlike the current situation where analysts are struggling to find evidence of excess oil. 00:00:50
The Vault: A reference to Donald Trump's announcement of a strategic reserve (the "Vault") to hoard metal for the United States, mirroring similar strategies in China. 00:03:27
Super Bowl 2000: Currie recalls the 2000 Super Bowl being full of internet ads like Pets.com, only for the market to rotate violently into the old economy 10 months later. 00:07:03
References & Recommendations
People Referenced:
Donald Trump: Referenced regarding his focus on low fuel prices and the creation of a national metal "Vault." 00:02:13
Tracy Alloway & Joe Weisenthal: Bloomberg hosts mentioned as part of the earlier studio discussion. 00:00:00
Tools & Platforms:
NASDAQ: Used to illustrate the decline in "asset-light" tech valuations. 00:04:04
Pets.com: Used as a historical case study for the .com bubble burst. 00:07:03
Speakers & Credentials
Jeff Currie: Head of Strategy for Commodities at Carlyle Group. A renowned commodities expert, he is famous for coining the term "Revenge of the Old Economy" and predicting previous super cycles.
Actionable Next Steps
Reassess "Oil at Sea" Data: Distinguish between sanctioned/unusable supply and actual marketable inventory when evaluating global oil availability. 00:00:43
Monitor AI Infrastructure Pull: Watch for supply constraints in copper, transformers, and natural gas as hyperscalers accelerate data center construction. 00:05:15
Prepare for Capital Rotation: Evaluate portfolio exposure to "asset-heavy" industries like mining, refining, and energy as capital shifts from tech to commodities. 00:03:57
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