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Oil crashing below $80 as Iran deal floods the market — short oil ETFs on weakness

Oil prices just dropped below $80 a barrel for the first time in months after the US and Iran reached a peace deal to reopen a major shipping route. Now that more oil can flow freely again, the market is bracing for a massive oversupply.

Idea

The US-Iran deal is reopening the Strait of Hormuz, which allows a massive wave of global oil supply to hit the market. Major banks are already slashing their price forecasts, and Qatar is moving ships back to ramp up exports. When supply suddenly outpaces demand, prices usually keep falling. Betting against oil via a broad tracking fund is a clean way to play this ongoing price drop.

Key details

USOH4#macro#energy#commodities

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