Oil collapsing as Iran deal nears — ride the energy selloff with short plays on oil stocks
Oil prices just had their worst month in six years because President Trump is on the verge of striking a deal with Iran. If an agreement is reached, more Iranian oil would flow back into the market, pushing prices even lower.
Idea
A U.S.-Iran deal would lift sanctions and unleash a wave of new oil supply onto the market right when prices are already in freefall. Brent crude just posted its biggest monthly drop in six years, which tells you how strongly traders are positioning for this outcome. Big oil companies like Chevron derive most of their profits from high crude prices, so they get hit twice — once from lower oil and once from shrinking margins. The Strait of Hormuz reopening would further ease supply fears that had been keeping a floor under prices. This is a classic case where the trend is your friend and the catalyst is still unfolding.