VirtualBacon
Crypto Investor & Educator, Macro Analysis
The energy sector is the trade as an energy crisis builds. Brent crude is holding near $109 a barrel, up from $105 on Friday, the EU has warned of a long-lasting energy crisis, UK diesel has crossed 100 pounds per fill-up and U.S. gasoline is above $4.10 a gallon. Trump has given Iran a 48-hour ultimatum to reopen the Strait of Hormuz or face infrastructure destruction, and markets are pricing in escalation risk. 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
US energy stocks are being steadily accumulated after a 17-year base, and that base will not resolve in a month. The sector broke out this year and pulled back on contracting volume, which is digestion, not distribution. Energy trades near 13x earnings versus about 20x for hyperscalers. Stocks now rise with oil and get bought back when oil falls. Tech is priced for the cost of capital to come down; energy for the reason it will not. x.com x.com x.comÂ
US energy stocks face pressure as the US-Iran memorandum of understanding reopens the Strait of Hormuz and lifts the US naval blockade. WTI broke below $80 from near $87 and could head toward $70, as oil, Treasury yields and the dollar broke lower together. Energy was the hardest-hit sector, while airlines rallied on relief from fuel costs. Lower oil eases inflation expectations, with headline CPI at 4.2% but core only 2.9%, removing pressure for Fed hikes. x.com x.comÂ
US energy stocks remain the trade because the Iran war keeps hitting oil supply; it is not a dip-buying chance in tech. Iran struck more Persian Gulf energy sites, including the Fujairah bypass route, erasing Monday's relief rally and lifting Brent back above $104. Hormuz is still contested, tanker insurance stays high, and the IEA's record 400 million-barrel release did not stop the climb. Chevron, Marathon Petroleum, Valero, Occidental and Phillips 66 held green as stock futures fell. x.com … Show more
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
US energy equities draw a skeptical response, with a sarcastic 'good luck with your energy thesis' to @PrognosticApex but no stated reason. x.comÂ
US energy stocks stand to benefit from the Strait of Hormuz closure. With Hormuz closed, energy stocks are open for business. x.comÂ
US energy stocks should catch a bid now that Iran's IRGC navy has closed the Strait of Hormuz indefinitely, effectively a blockade. About 20% of global oil supply moves through it, including crude from Saudi Arabia, Kuwait, Iraq and the UAE, with no alternative route for that volume. Tanker insurance should spike and rerouting around the Cape of Good Hope adds weeks on stretched supply, pushing crude higher. Fertilizer and plastics costs get squeezed, complicating the Fed's inflation view. x.com … Show more
US oil stocks have a fantastic long-term picture once Hormuz reopens, as the conflict lifts oil's floor, so any selloff on a US export ban would be a buying opportunity. A WTI-Brent spread that widened from flat to high double digits in two weeks signals a high risk of a ban, more likely on products than crude, which could pull WTI back and hit US names. Value them on long-term free cash flow and growth at $80 oil, with $75 WTI a possible new floor, not on a brief $150-200 spike. 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
