I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. Even if you don't work on Wall Street, if you want to be a savvy investor, or even if you just own a car, you need to understand the oil market. And it is a weird one. It's a tricky one. But today we're decoding that with the legend of all legends in the oil world, Mark Fisher, CEO of MBF Clearing Corp. Mark is a big deal in this space, and he's the perfect person to explain how the heck the oil markets work, what are the variables affecting it, and what's going to happen with the election and the war in the Middle East. Whether you're trying to be a day trader or just get really smart about the forces that move the markets, this is for you.

Mark Fisher, welcome to Money Rehab.

Thank you for having me.

Fish. I can call you Fish.

Hey, what else does?

Okay, so originally we were going to chat on Monday a couple of weeks ago when the market was freaking out. The market has since recovered, actually, and then some. But you still see lingering effects of this mess, or do you think the worst is still to come?

The worst is always still to come. It's just a matter of how you define the worst, Nicole, because what happened a couple of weeks ago when the volatility spiked and everything else is, the market has these uproars all the time. It's just a matter of how you define the uproar. But this is going to happen time and time again, especially with all the chaos in our election process, chaos in the environment, chaos Chaos going on in Israel, chaos in Russia. This is just the opening act.

How do you define the worst?

The worst to me would be something that has not had to happen, which would obviously be nuclear conflict. Besides that, Everything else, the markets basically digest everything. Because what typically happens is, think about what happened a couple of weeks ago. The minute Iran started lobbying missiles in Israel and everyone thought the price of oil was going to go bananas, it didn't. Why? Because Saudi Arabia in the Middle East doesn't want the price of oil to go up right now for a lot of reasons. One, they want US protection. Number two, they want to make sure the markets remain calm. Basically, anytime Saudi Arabia wants it, they can cap the price, which is what they did. The only way that couldn't happen is if Iran was to close the Strait of Hormel. Besides that, they have the ability to cap the price of oil. Saudi Arabia is a swing producer, and they have all the incremental barrels. Currently, right now, with the political election coming up, with Saudi Arabia wanting to get a security agreement in the United States. There's no way they're going to allow the price of oil to get above, in the United States, above $80, $85 a barrel until after the election, number one.

Well, this is a real test show. If Iran or the Houdis closed the Strait of Hormel. Other than that, the price of oil is going to get capped. On the other hand, once, and hopefully sooner rather than later, when there's a peace agreement or a ceasefire in Israel and God has to be reconstructed, who's going to pay for the reconstruction It's going to be the oil consumer because they're going to end up raising the price of oil by $10 a barrel, at least, to go ahead and pay, whether it be your consortium of the UAE, Saudi Arabia, whoever it may be, United States. It's all going to get raised to the price of oil, and that's going to raise the floor of the price of oil. But for right now, barring a disruption in the Gulf and also barricane, which would affect the refineries in our Gulf, the price of oil is stuck in the range. But again, this is not going to last forever. All right.

Well, I'm so glad you're here because you will forget more than anyone I think will ever know about energy. That's your thing. So let's step back because you gave us a lot of good information about the straight up Hormuz and all the things, right? But if you could tell listeners just a little oil 101 first. Something I hear from new investors a lot is that they don't even know how to check how oil is doing, right? If you want to know how Apple stock is doing, you type in AAPL, you see what Apple stock is doing, and that's it. But if someone wants to temper check what's going on with oil? How should they start?

If I was a novice investor, the easiest way to do is to go to the CME website, Chicago Mercantile Exchange website.

That's where I started my career.

Type in the price of oil or go to the You're going to Continental Exchange, type in the price of Brent or crude oil, and you'll get all the prices there for what happened that day. If I really want to go ahead and track the price of oil without looking at futures prices, on the New York Stock Exchange, there's a USO product that basically mimics the front month of crude oil. You could just type in symbol USO, and that will basically track the price of oil, but it won't give you the price of oil. So that's a stock that goes up and down based on the price of oil, but it doesn't tell you the price is being $80 or $75 or $90 or $60.

When you talk about oil, are you talking about crude oil? Can you define what that is? Yes.

Crude oil is what makes the world go around. Crude oil is the energy source that we use to go ahead and that gets refined into gas gasoline, heating oil, jet fuel, and all those different products that everyday Americans and every consumer needs. Crude oil itself is just the input. It then has to be refined in a refinery. I think you live in California, right? Mm-hmm. Okay. In California, there were refineries that are owned by the state Chevron. We just left the state, by the way, because of all the regulations in California, which is to start for another time. These refineries crack or basically, in in its terms, take the crude oil, process it, and make it into heating oil, jet fuel, synthetics, gasoline, and everything else. And that's what you buy when you go to the gas station. But without that input, you're not going to be able to produce that All right.

If you're not an energy trader, you're going to get energy exposure through energy stocks, right? But there are so many and a lot included there. Can you give us some examples of the different varieties of energy stocks or how you can get exposure?

There are big companies like ExxonMobil and Chevron that basically do everything. There are companies that just participate in drilling. There are companies that just participate in refining the products, which are my favorites, okay? Like the Valero, Marathons, PBFs of the world. There's also MLPs, Master Limited Partnerships, that concentrate on different parts of the natural gas market, which is a different instrument than obviously crude oil. There's also people that actually make the drilling equipment to drill for oil, like Schlumberger and Halliburton, companies like that. So there's all different... It depends how general or how specific you want to get.

Why are refineries your favorites? And what are some of the tickers that you're talking about?

Refineries are my favorite, and I'll tell you why. Everyone thinks that we're going to go ahead and go to clean energy in the next 15 years. I don't think so. I think it's going to take 50 years, if that much, because the price tag to go to clean energy right now is still too high. Right now, if you're not going to have clean energy and you're going to still rely on what I call the old gas cost. You need companies that take crude oil and refine it into the products, which we'd say, gasoline, heating, all the stuff that you use. However, there's not many new refiners ever being built because they know it's, one, a very regulated business, the environmental is sold all over it, and who wants to go into a business where 20 years from now, you can be out of business. Basically, these refiners have a monopoly on what they do, a quasi-monopoly. They don't set the price, but there's nobody else coming into business. If you were to go into business, Nicole, where you know that there was limited competition, and the world thought you were only going to be in business for 15 years, but I think you're going to be in business for more than 50 years, and no one else is coming in, and everybody doesn't like you, but they need you.

That's what's going to happen. If you shut down, the world's much worse off. To me, that's a business long term you want to be in. Now, can the refining margins, the difference between the price of gasoline and the price of crude will go up to down? Yes, right now it's depressed. But inevitably, a business that you basically have a moat around it because no one's getting into the business, but everyone needs it. Aren't those the best businesses to be in? Things that everyone needs, especially if you're one of the only games in town.

It's a little supply and demand. What are we talking about? What stocks and what companies?

I don't like to recommend individual stocks because I'm not a stock guy. But if you can look up the tickets, there's Valero, MPC, there's a whole bunch of them. Again, I would encourage anyone to do their own research because I'm not walking this. But the industry itself, to me, is a necessity. It's essential. People think it's only going to be essential for 10 years, and I think that's for the 10, 15 10 years. And I think it's going to be essential for a hell of a lot longer. So if you feel that there's a business like that, that's why I think it's viable.

And what about renewables?

I don't know enough about renewables, but I could tell you one thing. Let's talk about renewables for a second. What happened in Texas three years ago, four years ago? So what happened in Texas was- What happened in Texas? So the price of ERCAT, which is electricity and power, was, let's say, about 50, $60 a megawatt, which is what it was during the winter. And then they had this crazy storm come. And everyone was saying, Well, you're counting on the renewables, wind, solar. But what happened is they weren't prepared and they didn't do enough maintenance on it. And the storm came, what happened to the wind turbines? They all shut down. What happened to solar? It didn't work. And the price of power in Texas for that week went from $60 a megawatt to $9,000. So all these companies in Texas who were basically suppliers, who were middlemen, end up going broke. Now, they've corrected the situation going forward so that hopefully it won't happen to that degree again. But again, it's not about having renewables. It's about having reliable renewables. All these wind projects throughout the country are all shutting down because A, number one, they're not reliable, two, they're overregulated, and three, some of them just don't work.

So yes, should we go to clean energy? Should we go to... Yeah, but we need reliable energy. I don't think we're yet there to do this. Think about this. Solar power is great when the sun's out, but until there's a battery storage mechanism that can do it when the sun's not there, what happens? Do we have enough reliable clean energy? What happens to the most reliable clean energy that everyone's scared of is nuclear. And everyone's afraid of it. That goes under the slogan of N-I-N-B-Y, not in my backyard. Everybody wants it, but nobody wants a nuclear power plant. Can you explain what nuclear energy is and why people think that it's a nuclear bomb and are scared of it? It's because it happened in Charnobyl. Everyone's afraid that they're going to wake up, they're going to be in Charnobyl in the backyard. How the isotope works. I was a business major. I'm not an engineer. But Obviously, it's clean energy, right? But everyone's afraid of a catastrophe. It's all perception rather than reality. I mean, knock on wood, we really haven't had an issue like that in a long time, but that's the problem. That's the cleanest thing.

And by the way, more and more companies and more and more countries are embracing nuclear energy. I think Biden just put out a platform about it just recently. And to do that, you need uranium. It says more and more countries now are embracing uranium. What do you think has happened to the price of uranium in the past three years? It's gone up. There's no free lunch. Anything we do in clean energy is going to cost money. Anything in clean energy is going to end up costing the consumer more. It's going to be somewhat inflation And really, for instance, everyone talks about the electric vehicles. The electric vehicles themselves, the batteries and everything else that drive these vehicles to produce them, need a tremendous amount of energy to create them. So there's all costs and benefit analysis of the whole process.

Hold on to your wallet. Money Rehab will be right back. And now for some more Money Rehab.

Let's talk about generally how energy stocks the sector moves. Tech, for example, tends to go up when interest rates go down. What about oil and interest rates? And what about the relationship between oil and the dollar?

There's no relationship between oil and interest rates that I know of. But I think there's a relationship between oil and recessions because obviously everyone thinks like, for instance, if we're going into a recession, there's going to be less usage of cars and people are going to cut back. So typically that's what happens. If you remember a couple of years during COVID when everyone felt that there was an oversupply of oil and oil prices went negative for a day, which is like, think about that, they paid you to take energy. Again, that happens a lot of times, by the way, in natural gas, which is, to me, would be the solution because CNG, which is combustion of natural gas, should be the way we should drive our cars, but the world doesn't really accept that because natural gas is much safer from the environment, much better than coal or crude oil. But yet again, the problem with natural gas is where we have it all, like in the permium and everything else in Texas and other areas, you need to transport that through pipes. If there's not enough pipeline mechanism to ship it, then it just lays idle.

And natural gas has gone negative. But if it look like in Boston, do you have any friends in Boston?

Yeah, I have friends in all sorts of places.

You don't have to tell me who they are. Okay, you have friends in Boston. But in Boston, there's no pipelines going into Boston. So there in the winters, the price of natural Gas when the rest of the country can be $3, the price in Boston could be $20, not because the country doesn't have enough natural gas, but there's not enough pipelines going into Boston, you have these shortages all the time, and then you have to ship it in by energy. So it's a little It's a little complex, but it's also because there's not enough pipelines into Boston because of environmental reasons. But again, you can have prices of energy in parts of the country being five times the prices of other prices in the energy. The same way, why does gas then cost more in California than it does in, I don't know, Florida or Texas?

Because we have a lot of regulations and stuff.

Right. There's a lot of regulation, and there's no refineries, and all the rest.

Crazy story. In my middle school, there was an oil rig on the campus, and it was covered and the kids painted over it.

Yeah. It's weird. And the reason for that is because they got paid a royalty. Someone got paid a royalty every day when they were extracting oil from that rig. Today, there would be no way in hell that there would be an oil rig in the middle of a school.

I don't think that's really safe. But anyway, there is, though, a clear relationship between oil and the dollar. Can you explain how this moves?

Well, oil is priced in dollars right now. So let's talk about this, okay? Let's talk about Japan. Up until recently, the Japanese currency has been getting walked, right? Now, the Bank of Japan has stepped in to normalize that in Japan. But think about this, the Yen has gone down 40 % or 30 %, some number, in the last couple of years against the dollar. If you have to go ahead and buy oil, which is priced in dollars in Yen, what's happened to the price of oil in Japan? It's basically gone up 40% because people have to pay for it in a depreciated currency. Again, there's a big relationship. If the dollar gets cheaper relative to other currencies, then foreign markets are going to go ahead and buy more oil because it's relatively cheap for them. If the dollar gets more expensive and you to pay more Yen or more Euro or more, I know, Zimbabwe dollar for it or annual, that's a whole story for another time. Then you're going to cut back your energy because you just can't afford it.

You went on CNBC earlier this month and you said that we're approaching the bottom of the energy trade. What do you mean by that and why do you say that? No, no.

What I said was that this was a very bullish period to day trade energies from alongside. What I also said is that next year, we're probably going to go ahead. We've been stuck in a range of 70 to 85. I think next year, especially post-election, especially post, hopefully, some type of resolution in Israel, that the market is going to trade below 70 and above 85. Because once there's a... The whole market is short right now. There's nobody really long. Most of the speculators are short for the first time. The market usually goes up the most when everyone's short. Because if everyone's long, then people get out. But in the other hand, I think that the market next year is going to get, at some point, is going to trade below 70 and above 85. So this band that we've been stuck in for the past year and a half is going to go away, so which means it's going to be volatile. And if you're a trader, if anything, I don't care if you trade stocks, currencies, Barbie dolls, whatever you trade. But Do you trade Legos. It doesn't matter. All a trader wants is volatility because the way you lose money if you're a trader is that things are just dead.

You just want things to move. At least that's what we want.

Not long term investors, traders, to be clear. And by the way, don't no, no, no me, because literally the headline from Closing Bell was, Mark Fisher says, This moment will be the bottom of the energy trade.

The bottom of the- Lay on the copywriters as- The bottom of the energy trade to me is when there's a ceasefire. Let's think what's going to happen. Let's go through it because again, play chess. There's a ceasefire. Okay. And let's say, Hopefully it holds. Okay, now they have to spend, they estimate $70 billion to reconstruct Gaza and the West Burma. Where's that money coming from? You think Saudi or UAE is just going to say, Okay, here's a check. You think the United States is writing a check? No. You think Israel is writing a check? No. So in the end of the day, how is that getting financed? That's getting financed because they're going to raise the price of oil. They're going to raise the price of oil by 5, $10, $15, whatever it may be. And you and I, along with everyone on your shoulders, go ahead and go to this, are going to pay that price. To me, that's just That's inevitable.

But it's hard to predict what's going to happen there. I mean, doesn't the war in the Middle East make it difficult to predict where oil is going to go in the short term?

That's why I said, When there's a ceasefire? I don't know when it's going to be. Hopefully, it was today, but it doesn't look that way. But when that ceasefire occurs, 48 hours after that, to me, would be the bottom. That'd probably be the bomb to buy energy stocks and everything else. Because by the way, you know one thing, whatever people think works in the market, whatever makes If everything makes sense, it doesn't make money. Because if everyone can make money, it will make sense? We'd all be multi-zillionaires. The same way that if everything made sense and everyone went to Harvard or Wharton or Yale or Stanford would be a multi... And that's not the case. It's thinking out of the box, thinking six steps ahead. If I said to you, if I called up 20 traders and said, Why is oil up today? Or why is stock X up today? And they all gave me a reason. It's not going up much more. But if I called up 20 people and said, Why is stock X up today? They said, I have no idea. That stock's usually going up a lot more. When people figure out why it's going up or something's going up, then usually that's the top.

I'm all convoluted because I'm a little insane, as you can probably tell, but that's the way we think.

I'm well aware that you're insane, but I also really think that your thoughts on energy are super spot on, and we could ask a lot of people, but we're asking you because of that. Also, you mentioned the election. Obviously, there's always volatility on election years. Regardless of Trump or Harris's actual oil platforms on oil, we haven't really seen much clarity there. The street expects oil to go up when a Republican generally is in office. Is that the same case?

No, not with Trump, because everyone thinks that with Trump, he's just going to let drill, baby, drill. Although we are with drilling. We're drilling as much. We're producing more oil now than we've ever produced, even under the Biden administration. It's going to come down to the swing producers. It's also going to come down to what happens in Venezuela to some degree. Venezuela Venezuela. What's going to happen? For a while there, it looked like we were going to go ahead and somewhat normalize relations in Venezuela to Maduro went off the reservation again in this last election. It's what's happening in Guiana, where they We found this huge oil find that they're now just putting the pedal to the metal to reduce as much as possible. But I don't necessarily think that the market thinks that if Trump wins, the price of oil is going up. I think they feel if Trump wins, volatility everywhere is going to because of the wild card of what would happen under his administration. But I think that would happen under whoever's the president that's going to happen.

It's just a regulation question. Yeah.

I think businesses that get regulated end up having to unnecessarily charge more money for the same product that they have because they get regulated to death. It doesn't matter what it is. It could be oil or anything else.

You mentioned some index funds. If there's a new investor who wants to dabble in energy, what are some of the basics that they should take a look at? Not that you're recommending them. I know you're insane.

You're good inside. If you want to trade the price of oil, you trade USO. If you want to trade an index of stocks, you trade XLA, which is an index of energy stocks. That's what I would do in that case.

You want to play a game with me?

Why not?

That sounds so excited.

This is a game called Bullish or Barish.

Oh, no. You're going to tell me, Are you There's bullish, and there's bearish, and there's the guy, and why, right? Okay, go ahead.

Petroleum. Bullish or bearish? Bullish. Do you get the game? First Solar.

The solar industry itself, bullish. First Solar, I don't know individual stocks.

Gold.

Definitely bullish. Silver. Not as bullish as gold, but usually when gold goes up a lot, silver has these crazy periods of time.

Crude oil.

Crude oil is energy. Okay, up. It's the same thing in the cold. Keep going. You know why gold is going to go up, right?

Tell me.

Because the world's- Because it's all going to Armageddon. No, because gold is the world's anxiety index. Look what's happened. Over the last three years, gold has gone up because every central bank outside the United States has been increasing their reserves of gold, whether it be China, Far East, everybody, except for the United States. Maybe, we don't know. At the same time, all the ETFs that hold GLD hold gold, the spectators have been getting out of their holdings. So you've had the price of gold go from, I don't know, 15, 60 to almost $2,500, and yet, there are less investors in gold. So what's going to happen when everyone panics and they say, Oh, we need more exposure to gold? Then the price is really going to take off. I see that the street thinks gold is going to $700, $300, $300. The goal can go a lot higher than that.

Okay, well, Bitcoin was supposed to also be a store of value or a safety.

It's interesting because Bitcoin, to me, has become a store of value because Everyone... Because it's perception. Everyone views it as a store value. Okay. I don't really understand everything else but Bitcoin because everything else to me is a digital credit card, like Ethereum. I know people who tell me, but I don't really... Because I think those are digital credit cards. I know they have a lot of applications, and I'm not smart enough to understand. But Bitcoin has become like digital gold.

So bullish?

Yeah.

Tesla.

Who?

Tesla.

I don't know. If you ask me electric vehicles in general, yes. Is Elon Musk a genius? Ten times smarter than anyone I know. So probably Tesla will keep going up, yes.

Wind energy.

Wind energy, I think, is a very hard... I think I'm negative.

Bearish. What? Burish. If this is a bull or bear game. Bearish. Okay. What stalker sector are you bullish on? This is the final round that I didn't mention.

Besides you're mentioning, well, all the gold miners. Insurance. Insurance, I'm negative. I think that's going to be the next regulatory industry. And that actually is a good point because look what's happening now. The state of Florida has a condo crisis, and that's going to morph over into New York, anywhere there's condos, because of what's going on with the insurance prices. If you live now in the state of Florida, condominium prices, especially near within 15 miles of water, the insurance has gone up 50, 60, 70%, and you can't go ahead and have a mortgage unless you have insurance. The crazy part is that now insurance in a lot of places cost more per month than your mortgage costs, and people are getting killed on this. When the general population is getting killed, then it's going to get regulated. I don't know how it's going to get regulated, but somehow someone's going to put a stop to it. I told your executive at this point that seven years ago when Hurricane Irma happened and my wife made me escape to New York during the hurricane, I came back and my house almost flooded because I have these sliding glass doors.

I don't know if you know what's the sign of the doors, but they sit on a track. And no matter how well your doors are, when there's a lot of wind and water, especially at higher elevation, the wind and water pushes right through the track and creates There's a disaster's inside your apartments. This almost happened to my house.

Yeah, you didn't have an apartment. You had a chateau.

Okay, whatever I have, it doesn't matter. It's true or false? I don't know. So much true. It doesn't matter. Okay. So anyway, with that being said, yes, So my house almost flutter completely. So we came up with a solution actually for this problem, at least for us, that took us about seven years to do and about a gazillion man hours. But in about four weeks, it's going to be in Home Depot, five weeks, so that people can go ahead and mitigate at least this part of the phone, which is a big deal.

Total big deal. Fish, we end our episodes by asking all of our guests for a tip that listeners can take straight to the bank. Could you have a final tip about energy?

Yeah. Wait till there's a good ceasefire in Gaza. Hold your breath. There'll be one more battle sign, and then you can buy. It's like what happened when... Remember when they caught Saddam Hussein? I don't know if you remember that.

I do. I was on the air.

Where were you?

I was at... Well, Osama bin Laden, I woke up at 2:00 AM, went to CNN. This is before. I know. Before that, I was at CNN with Saddam.

Really? Everyone thought when Saddam Hussein When he got caught, that the price of oil was going to go down because the whole thing was over. If you bought energy 10 hours after he got caught, what do you think happened to the price of energy over the next six months? Went straight up. When this Conflict, hopefully, sooner rather later, it's somewhat of a resolution. If you close your eyes and wait 24, 48 hours, I'm saying this now, I'll probably be dead wrong because usually I'm either dead wrong of it, things are dead right. There's no middle with I'm either, Wow, you were really right, or, wow, you suck. But that's my bet.

Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan LaVoy. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your moneyquestions, moneyrehab@moneynewsnetwork. Com, to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram @moneynews and TikTok @moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.