It’s been over 2 months since we released our thought piece on the oil markets in the summer. The things we were seeing surprised us so much that at the time of release I thought it could be one of the most important theses we have written about here.
Hiding in Plain Sight
In lieu of this week’s Scouting the Tape, we wanted to provide a more detailed piece on an important opportunity. This write up is a deep-dive on an area we would probably categorize as the most attractive long setup across all markets today. This piece runs through the following.
That has turned out to be the case as oil has been the best performing asset in the world since. BNO, the ETF that tracks continuously rolled Brent futures contracts, is +27% in the 70+ days since our report.
Despite the constant headline bombardment and fake news from the administration, we’ve done a good job in sticking to our conviction in the thesis. Read through my X feed over the last few weeks and months and you will be able to see our narration of each headline, angle of the trade and new data that all continued to validate our views while the broader investment community has largely shied away from one of the best performing asset classes in the market.
This follow up report aims to review what we saw and how it played out, take stock of all the new information and additions to the thesis since and summarize that into our latest thinking on the topic.
In this report we cover:
Summary
Key investment highlights
Updates
Bear case
Trade management
Summary
The thesis has not only worked, but it has worked for the reasons we gave. Of 21 bull pillars and sub-points, 14 were validated, exceeded or played out, 5 partially did and 2 are pending.