u/Doditty6567

Physical oil (Dated Brent) trades >$40 above futures, signaling an acute supply emergency the equity market (SPY) is ignoring as it rebounds. If the physical oil shortage persists or worsens, it will violently reprice risk assets, leading to a market crash. The author is explicitly short SPY, believing equities are complacent and due for a severe correction. The Hormuz Strait reopens; the supply shock is absorbed without major economic impact; continued central bank or government intervention supports markets.

Physical crude (North Sea Forties) trades near $150/bbl, and OPEC+ output has collapsed by 7.7 million bpd. The physical market's extreme backwardation indicates a severe near-term shortage that futures have not fully captured, favoring direct oil exposure. Hold BNO (Brent Crude Oil ETF) to benefit from rising oil prices as the supply deficit becomes undeniable. Strategic petroleum releases continue; a swift resolution to the Hormuz crisis; demand destruction from high prices.