Oil crashing on Iran deal hopes — position for even lower energy prices
Oil prices just had their worst month in six years because President Trump says the U.S. is on the verge of a deal with Iran that could end the conflict and bring more oil supply to the market. More supply means cheaper oil.
Idea
Oil is already down massively this month — its worst stretch in six years — and the catalyst behind the drop hasn't even happened yet. Trump says a 'final determination' on the Iran deal is coming, which means more Iranian oil could flood the market if a deal is signed. That would push prices even lower. When a commodity is falling on a clear, ongoing news story that hasn't been resolved, the trend tends to continue because sellers keep ahead of the news. Oil-related stocks and ETFs like XLE (an energy sector basket) should also feel the pressure as investors brace for lower oil profits from the big drillers.