Oil-equity correlations break during oil supply shocks
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McCullen: "We are expecting the next blackout window to begin this week ~3/18, estimating ~45% of the S&P 500 to be in blackout by that point, assuming entry 6 weeks prior to earnings ... We expect blackout to run through the end of April." Source: TME
Asia: Paying very high prices (~$150+/barrel) US/West: Paying much lower prices (~$95–$105/barrel) T This as an unprecedented “broken” market driven by geopolitics, not normal supply/demand. ⚠️ Main Reasons Strait of Hormuz disruption: A major shipping route (≈20% of global oil supply) is allegedly blocked or restricted. Geopolitical tensions (Iran): Seen as the key player controlling whether supply resumes. Emergency reserves released: Large releases from global and US reserves are being used to stabilize prices. US reserves are described as historically low. 📊 Key Effects 1. Two-tier pricing system Countries with domestic oil (like the US) are better protected. Import-dependent Asian economies pay much more. 2. Economic strain in Asia High oil prices → rising costs → factories slowing or shutting down. Early signs of “demand destruction” (reduced consumption due to high prices). 3. Shrinking safety buffers Strategic oil reserves may only last weeks at current usage rates. Limited ability to replenish during conflict. 4. Rising US fuel prices Gas prices expected to increase significantly if oil rises further. 5. Inflation risk Higher energy costs could: Push inflation back up Force central banks to delay or reverse rate cuts 6. Iran’s leverage Iran is portrayed as holding decisive control over supply routes. Ongoing conflict reduces chances of quick resolution. Source: zerohedge
There is meaningful dispersion across constituents beneath the surface, reflecting a market that is quickly separating durable growers from more challenged business models. Source: Rick Rieder

