Thesis: It’s going to end badly for oil speculators.

There’s been a sort of rolling correction / bear market over the past 6 months or so. One by one, speculative bubbles that went too far have burst spectacularly, whether it’s AI / Big Tech, quantum, big banks, virtual currency, RAM / data storage, precious metals, and more. These investment categories went parabolic in 2025, topped out between October ‘25 & January ‘26, and have nosedived since. It feels like we’ve seen this same movie play out over & over & over, yet speculators keep piling on the latest hot trade of the month… Oil is clearly on a parabolic run right now, jumping from $55 at beginning of year, to $66 before war broke out, to $119 at the time of this writing. It’s gone on a 10-day rally that’s eclipsed the 2022 (Russia-Ukraine) and 2007 (US-Iraq) oil spikes in speed & magnitude. **1) High oil prices are political poison.** There is immense pressure for politicians to use every lever they have to push prices down before voters revolt. **2) This is a supply-driven speculative price spike, not a demand-driven shortage. Global demand has been weakening.** The U.S. economy is clearly decelerating & China’s is also treading water. That’s why oil was $55 earlier this year. **Things that could potentially trigger an oil price reversal in the near future:** * CME raises margin requirements. They did this in 2022. * U.S. and/or IEA release oil from reserves. Both have said this is not yet under consideration, but if prices keep shooting up, they will relent at some point. * Iran military / Revolutionary Guards are weakened sufficiently that ships can transit through the Strait of Hormuz again. U.S. military escorts ships & insurance rates fall once there’s a safe passage. * Global slowdown / recession dampens oil demand even more. This was what happened in 2008 even as the Iraq war raged on. * Iran surrenders. Not likely right now. * U.S. led de-escalation. Not likely right now.