Public trading strategy

Tanker attacks reignite Middle East tensions — ride the sudden oil spike

Thesis

Just days ago, Saudi Arabia was preparing to slash oil prices because the Strait of Hormuz was reopening and supply was flowing freely. But the situation completely flipped over the weekend when fresh attacks on tankers forced shipping companies to reroute, causing oil prices to spike. When a market goes from pricing in abundant supply to fearing an immediate shortage overnight, energy stocks surge as investors price in the sudden risk premium.

Strategy approach

Build a rule-based strategy that enters long XLE on D1 when front-month WTI crude oil futures (CL1) gain > 2% in a single session. Exit when CL1 drops > 3% from its recent 5-day high, or after a 14-day max hold.

Markets and timeframes

USOXLEXOMD1

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