Andy Heilman
Principal Owner of MH & Associates
Crude oil and the XLE energy-sector ETF would be buys on a pullback because uncertainty over a real military strike could hang over the US market from the midterms through year-end. Only an actual strike or a true peace deal would settle that uncertainty. x.comÂ
Oil stocks are worth buying on any dip because this is the biggest energy crisis, and its shock wave has not yet reached the US. Some oil producers are hurt by the Strait of Hormuz blockade, so weakness can be company-specific, as @StockyPlatano's planned short of Occidental Petroleum suggests. x.com x.comÂ
Oil-related stocks will be hit hard over the coming months and the next year, so it is way too early to buy them. Only later, in the next cycle, will oil-related stocks, including oil service names, do very well. A follower summarizing the call describes oil falling first, then rising toward 500 in the following cycle. x.com x.comÂ
Crude oil should stay higher for longer because, even if the war ends, US inventories will need rebuilding. Per The Kobeissi Letter, total US crude stocks including the Strategic Petroleum Reserve fell a record 17.8 million barrels in a week, the eighth straight decline, and 42 million barrels, or 10% of the SPR, have been drained since the Iran war began, leaving it at 374 million barrels, the lowest since July 2024. x.comÂ
Oil now matters more for markets because the Fed is considering oil in its reaction function, no longer looking through supply shocks. Once the Fed reacts to oil, yields react to oil. x.comÂ
Oil rises every time the Iran war escalates, making a long position on each escalation an easy trade. x.comÂ
US energy stocks such as Valero are resuming their uptrend after a brief ceasefire correction because the US is draining reserves at an incredibly fast pace to keep oil and gasoline flowing and stop prices from spiraling. x.comÂ
The oil trade is over because crude can no longer make higher highs, even with Middle East crude exports back near their peaks. Oil is trading around its average price of the last eight months and set a lower high in September, so it is only a matter of time before the market gives up. Crude looks about to fall through the floor, with rates following and high-beta stocks then going vertical as every dip gets bought. x.com x.com x.comÂ
Energy stocks enter the week bullish after the president announced a great oil deal and crude gapped up, a move worth noting for its future impact. The view covers broad energy and exploration-and-production funds, refiners Marathon Petroleum, PBF Energy and Valero, drillers Transocean, Helmerich & Payne and Valaris, and service companies NESR and SLB. x.comÂ
Oil will come down significantly, because Trump will eventually make a deal with Iran and put the conflict to bed. x.comÂ