Episode summary
Massive Selloff Today: Start Of Something Bigger? | Ole Hansen
The David Lin Report
· · 41 min · Hosts: David Lin · Guests: Ole Hansen
Summary
Ole Hansen argues that the day’s selloff is being driven by two linked forces: higher energy costs and a growing reassessment of the AI trade. He says Brent above $112 is not the “right price” because the real cost is higher once shipping, insurance, and refinery bottlenecks are included, and that the market is finally asking whether the huge spending in AI will produce adequate returns.
On oil, Hansen says flows through and around the Strait of Hormuz have recovered closer to pre-war levels, but that does not mean relief for consumers because refined fuels remain scarce. He emphasizes that diesel and distillates are still far more constrained than crude, with refinery capacity in the Middle East and parts of Asia limiting supply. He also says China’s reduced imports have been an important balancing factor, without which prices would be even higher.
He remains constructive on longer-term gold and copper, but near term he sees both under pressure from speculative selling, a stronger dollar, and uncertainty around inflation, tariffs, and AI-related demand. In Europe, he warns that France’s fiscal stress and high gas prices add to broader market fragility.
Key takeaways
- Hansen says the selloff reflects both expensive oil and investors demanding proof that AI capex will generate returns.
- He argues Brent near $112 understates the true cost because shipping, insurance, and refinery constraints add roughly another $30.
- He sees diesel and other distillates as the real bottleneck, not crude oil, because refinery capacity remains tight in the Middle East and Asia.
- He says gold is still long-term bullish, but short-term traders are pressing the downside until prices recover key technical levels around 4230.
- He stays bullish on copper, but says weaker Nasdaq sentiment and possible changes to US tariff expectations could slow the rally.
Notable quotes
“that money costs money. Um, and that nothing comes for free. Brent crude at atund 112 is is not really the right price”
“the market is starting to ask the questions that probably needs to be asked because uh I think it's it's pretty clear for everyone that the rally exceedingly become unhealthy”
“it it ultimately yes oil is flowing but it's it's flowing at such a very high price that that ultimately we are we are still paying a very high price”
“the flow of uh fuel products which is really what we need and LG are still way below where where we had them before the war started”
“I maintain my long-term bullish view for gold 10 20% higher in the years from now”
How the episode opens
What do you think investors are finally waking up to? — Well, that money costs money. Um, and that nothing comes for free. Brent crude at atund 112 is is not really the right price. You should probably add uh potentially another $30 on top. The final price is a lot higher than what we see on on the screen.
It's big down day today on October 22nd for stock markets as oil prices continue to climb and fears around the AI trade grow. The S&P 500 is down more than 1%. The NASDAQ is down 2 and a.5%.
Gold is down almost 2%. Bitcoin's down three and a half%. Treasury yields have continued to slide.
They have been sliding on the long end ever since the beginning of October. So our next guest, Ole Hansen, head of quality strategy at Saxo Bank, is going to give us his outlook on not just oil. We're going to talk about what's next for oil and distillate products, gasoline, diesel, but also what's causing today's selloff and whether or not this selloff is going to continue.
He's also going to give us his outlook on inflation and gold. Welcome back to the show, Ollie. Good to see you.
Thank you very much, David. — Yeah, big down day today. Uh oil is spiking, which we'll start with. Uh but why are stocks moving? Is it is it an oil and story or something else? — Well, I think the uh oil price now in in Brent above $112 most certainly doesn't help the the sentiment. Uh but I think add adding to that we we've seen some of the earnings this week from the the tech sector especially in the US and it just seems like we had a bit of a lukewarm response to uh to some of these results.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- market selloff
- iran war energy supplies
- gold outlook
- natural gas supply crunch
- copper and commodities
Companies and tickers mentioned
- Saxo Bank
Watch the episode
Watch “Massive Selloff Today: Start Of Something Bigger? | Ole Hansen” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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