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A bear case for energy
Oil stocks are going parabolic. Headlines say that oil prices will continue to remain high for a very long time. The things I'm seeing in the transportation sector make me think that the oil rally could end sooner than we realize.

First, US rail traffic remains below 2021 levels. Railroads run on gasoline and natural gas. If there's less demand for gasoline and gas from the railroad industry, then that reduces demand for gasoline.

Second, shipping demand is declining. $ZIM is down nearly 15% today and $MATX is down nearly 12%. Based on the stock chart patterns, the shipping rally could be over.

Third, the decline in e-commerce is reducing the demand for transportation services altogether. $UPS and $FDX rely immensely on e-commerce growth for revenue growth. If other transportation companies see lower demand for their services, then it would mean that even FedEx and UPS should be seeing lower demand for their services too.

This year's busy travel season can be the fuel that provides the last stampede in the oil rally. Airlines, cruises, taxis, and other modes of transportation consume huge amounts of energy. It would be no surprise to be that the busy travel season will be why WTI Crude hits $150/barrel during the summer.

After this year's busy travel season, I wouldn't be surprised if the economy enters a recession shortly after. And with a recession, energy prices will plunge significantly as demand for energy has plunged.

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