Finding the Market’s Most Overlooked Macro Themes and Profiting from Global Volatility and Commodity Chaos | Harris Kupperman and Roderick van Zuylen
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You can look at commodities and have all the opinions of the world. Nothing matters until the commodity tells you it's ready. I think the most important thing to track in this whole thing isn't when Hormuz opens. It's when guys announce brand new refineries, and no one's announcing refineries right now because no one thinks that this is actually a tight market. They just think there's geopolitical tightness. And as soon as the war ends, there's this excess slack in the system. And so until people announce many millions of capacity additions, I think it's a great trade.
In today's market, thematics drive everything. You have the narrative, you have the fundamentals, and then you have the catalyst. Today, I'm speaking with two investors who are experts at combining thematic macro and equity research with event driven special situation catalysts. Harris Kupperman, CIO of Praetorian Capital, and Roderick Van Zuylen, CIO of Nightwatch Capital. They are both primary contributors to Kenm Research, and today, we are going to discuss some of the themes and events they are tracking that many investors are missing. And for monetary matters listeners, we have a special
Very big picture. You know, it's a supply demand. I I do supply demand stuff. They're very basic. If you look at Platts or Rysted, they'll tell you that there's some deletions going on in Europe and The US, and there's some additions happening in The Middle East, India, Nigeria, Mexico. What those guys miss is that people in you Texans run theirs at 95% utilization, and the Mexicans burn theirs down. You know, India doesn't hit the same uptime percentages as the Texans do. So it kind of looks balanced, but when you actually look at it on utilization, it isn't. And I think even the way Rystow w
Roderick, did you see it the same way?
Yeah, so Kupi flagged this sometime in 2025 and it took some time to get me convinced on the thesis. Think the last five years post COVID, there hasn't been a major shortage. Like there's been some capacity additions in China and The Middle East and that order book is now sort of empty. So it took me some time to see it the way he does, but right now, like you said, the crack spread is waking up, but there is fundamental reasons for that. The disease keeps getting better and better. Venezuela was incrementally positive for US refiners. They have high complexity. They are set up to handle heavy
It's interesting. And maybe we should just quickly define crack spread for everybody who's not deep into the refiners. So refiners are refining crude oil into refined products like jet fuel, like diesel, gasoline, etcetera. And so the the spread is the difference in price between what a barrel of oil goes for and what they're able to sell, the refined products that they're getting out of that. And so when that spread widens, that means refiners can make more money. And so when you talk about refiners, you know, there are ETFs, but then as well, as you said, there are things that benefit specif
I just took it from a big picture standpoint. The funny thing about refiners, they tend to burn down a lot. And I don't wanna be in the small guys because if you have three or four refiners and you lose one, suddenly your debt covenants become material. I really wanna be in the guys that are, pad three focused. I didn't expect the Venezuelan oil to come in. I just want the seaborne. But obviously, Venezuela gives you a huge advantage versus many other refiners. I don't I don't want the Mid Con. I don't you know, I I really want the the pad three guys. And so for me, the way I thou
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