I hope Trump can successfully keep the "Trump Strait" open. Today, I have supplemented my positions at 92.5 dollars for WTI and 97 dollars for Brent. If it continues, I will add more to WTI at 97 dollars and to Brent at 102 dollars. It is important to ensure that the margin needs to be above 120 dollars. If the war intensifies, we may need to keep raising our positions and be prepared for the worst-case scenario.
I still do not see any problem with shorting oil. The current oil prices already include a high risk premium for war and the Strait of Hormuz. With each round of conflict between the U.S. and Iran, short-term prices could continue to rise. However, as soon as the throughput in the Strait begins to stabilize and recover, even if just partially reopening the Strait to certain countries, it will prompt the market to reprice.
Moreover, the higher the oil price, the greater the destruction to global demand. The pressure on U.S. gasoline prices and inflation will also increase, and countries will be more motivated to release reserves, seek alternative supplies, and push for an end to the war. Trump can endure high oil prices in the short term, but it is difficult to accept oil prices close to or exceeding 100 dollars in the long term. Therefore, reopening the Strait of Hormuz is still in the interest of the U.S. and even the world.
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