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Oil prices suffer biggest monthly drop in six years on Iran deal hopes — short energy stocks

Oil prices are tumbling as President Trump signals a final decision on a U.S.-Iran deal is imminent, which could end the conflict and bring more oil supply back to the global market.

Idea

The prospect of a U.S.-Iran ceasefire is easing fears about global energy shortages, particularly around the Strait of Hormuz. With oil posting its worst month in six years, a formal peace deal could drive crude prices down even further as supply fears evaporate. Because energy company profits are tightly linked to the price of oil, a continued drop in crude makes the overall energy sector highly vulnerable to more losses.

Key details

XLE1D#energy#macro#mean_reversion

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