Public trading strategy
Oil flood incoming as Middle East unloads stockpiles — short energy
Thesis
The geopolitical risk premium is coming out of the oil market. A peace deal has unlocked massive stockpiles, and the CEO of TotalEnergies confirms Middle East producers are desperate to offload supply, swamping the market. This fundamental shift from scarcity to oversupply points to lower prices ahead. The weakening Brent curve confirms the physical market is already overwhelmed. Shorting oil ETFs captures this downside momentum.
Strategy approach
Build a trend-following short strategy for USO on D1. Enter short when USO breaks below its 20-day low and the front-month WTI futures curve is in contango (prompt price lower than next month). Exit if USO closes above its 10-day EMA. Use a 15% max loss stop.