MW An oil bull's 'insane' bet: Why this veteran trader is buying energy stocks as prices tumble
By Barbara Kollmeyer
Kevin Muir says the view that oil will fall is too obvious
Weak oil stockpiles globally will ultimately help drive up prices, says former institutional trader Kevin Muir.
With a U.S.-Iran peace deal seemingly within grasp, it's not looking great for those who bet on rising oil prices. Global benchmark Brent and West Texas Intermediate crude have each dropped 16% in the last five sessions.
However, Kevin Muir, the former institutional trader turned blogger, would beg to differ. He argues that now is precisely the time to start buying oil in our call of the day.
Muir admitted that on its face, that probably looks like "an insane call," in his Macro Tourist Substack that published Wednesday.
"Over the years, I have found that when I am scared to write a post - when I am worried about looking like an idiot, those are often the best trades. Well, I can tell you, I am scared to admit I am buying energy."
Muir made a savvy call to buy oil in January, coinciding with President Donald Trump's foray into Venezuela. At the time, he argued that West Texas Intermediate oil at $57 a barrel couldn't go much lower as a lack of investment would eventually catch up to the neglected commodity. It has risen 31% since.
While the blogger said he hasn't been among those bellowing that oil was headed to $200 a barrel, he didn't sell any of his positions either. He believes the view oil prices will fall following an agreement to end the Middle East conflict is far too obvious and easy.
That deal, expected to be signed on Friday, prompted Goldman Sachs this week to slash its oil-price forecasts for this year and next.
"If my theory of 'the harder the trade, the better the trade' stays true, then this will be a humdinger," Muir admitted.
Oil prices were anchored about $100 rather than $200 per barrel, because the U.S. and other governments drew on their reserves to ease the pain of the crisis, and China slashed its oil imports. U.S. stockpiles have been hovering at their lowest in more than 40 years.
Not only will governments refill those inventories, they'll want to buy even more to protect against another crisis, he said.
As for how to play it, Muir said owning Brent crude oil futures or the United States Brent Oil Fund BNO works, but is keener on energy equities XLE he sees as cheap. The S&P 500 energy subsector index XX:SP500.10 traded at 20 times earnings in the early months of the war, but is now down to 12 times, he said. Energy earnings could "easily" grind higher in coming months and that P/E could rise to 16 times, he predicted.
Read: What have the U.S. and Iran agreed to? This is what markets are focused on.
The markets
Nasdaq-100 futures (NQ00) are higher, but the S&P 500 and Dow industrials (ES00) (YM00) appear set to broadly flatline. Oil prices (CL.1) (BRN00) are flat. Bitcoin (BTCUSD) is falling.
Key asset performance Last 5d 1m YTD 1y S&P 500 7511.35 1.69% 2.15% 9.73% 25.55% Nasdaq Composite 26,376.34 2.72% 1.95% 13.49% 35.12% 10-year Treasury 4.436 -12.30 -15.60 26.40 4.00 Gold 4348.5 6.21% -4.35% 0.38% 28.41% Oil 75.75 -17.53% -23.55% 31.95% 3.61% Data: MarketWatch. Treasury yields change expressed in basis points
The buzz
A decision from the Federal Open Market Committee is coming at 2 p.m., followed by Kevin Warsh's first news conference as Fed Chairman at 2:30 p.m. Economists aren't quite sure what to expect from Warsh, as his colleagues seem to be inching closer to wanting rate hikes.
U.S. retail sales for May are due at 8:30 a.m., followed by May pending-home sales at 10 a.m.
According to various media outlets, details of the U.S.-Iran memorandum of understanding show Iran will have access to a $300 billion development fund, be able to sell its oil immediately and eventually unlock frozen assets if it promises to never produce nuclear weapons.
BMW (XE:BMW) issued a profit warning, blaming weak China sales.
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-Barbara Kollmeyer
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June 17, 2026 06:56 ET (10:56 GMT)
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