Money illusion and the limits of shale: is $100 oil really expensive!?

The Macro Today hosts argue that on sector fundamentals alone, apart from the war, WTI will reach $300 within 5 years, and that the current nominal oil price around $90 is historically cheap once backwardation and currency debasement are considered. They explain that the July (month 7) 2008 nominal peak of $145 translates to $221 in 2026 CPI terms, and that oil also stands far from the 2008 crisis and the 1980s stagflation peaks relative to M2 and US per 1 person personal income. They note that 95 percent of transport energy and 86 percent of primary (category 1) energy still come from fossil fuels, while Tobin's Q at a record 2.19 times shows money crowded into financial assets and real assets like oil neglected. They say shale breakevens for new wells have risen steadily since 2018, with steel tariffs plus rising wages and operating costs pushing extraction costs higher. They explain that since 2019 about 90 percent of upstream investment has gone to offsetting natural decline at existing wells, and that halting investment would erase 550 ten-thousand barrels per day of production. They argue that initial output peaks at new wells fall every year and Tier 1 acreage is exhausted, so the safety valve of the 2010s, when output grew within 6 to 12 months of a price rise, is gone. They say shareholders, remembering the shale shock from 2014 to 2015 and negative prices in 2020, refuse capital spending, Venezuelan growth is impossible within an investor time horizon, and even the 400 ten-thousand barrels per day of spare capacity in Saudi Arabia and the UAE is blocked by war. All directional views are the speakers' conditional judgments and do not confirm any near-term price forecast.