Short positions on US oil funds are surging:
Short interest on the US Oil & Gas Exploration & Production ETF, $IEO, is up to 2.8%, near the highest in 4 years.
Short interest has TRIPLED since the start of 2026.
Over the same period, $IEO prices have risen +33% to an all-time high.
Furthermore, short interest in the United States Oil ETF, $USO, has soared ~3 million shares, or 50%, over the last month,
This means traders are increasingly betting against rising oil prices, even as the rally continues, a setup that often leads to extreme volatility.
Brace for more volatility in the oil market.
US oil and stock market futures open in 7 hours.
Markets have yet to react to a ton of new events, including US strikes on Kharg Island and President Trump's global call to militarily open the Strait of Hormuz.
However, the war timeline seems to be expanding, as the US is now saying the war will "likely" end within the "next few weeks."
This is a vastly different outlook than where we were just six days ago, on March 9th, when President Trump said the war was “very complete.”
And, even as the US Navy is preparing to "open" the Strait of Hormuz, shipping activity through the Strait remains near zero.
The US has 7 hours to calm oil markets before futures open, or oil prices are heading back above $100/barrel.
Prepare for more turbulence.
🚨 The futures market is LYING to you
WTI futures: $100/bbl
Dubai physical swaps: $138/bbl
$38 gap between paper oil and REAL barrels.
You know what that means…
Oil price won’t go up
Oil price might go up but will be transitory
Oil price did go up but it will come back down
Oil price going up is good for America
US futures open in less than 24 hours:
Yet, we have not seen any indication of de-escalation in the Middle East amid rapidly surging oil prices.
Meanwhile, Kuwait, the UAE, Saudi Arabia, Iraq, and Qatar have all confirmed at least partial oil production shutdowns.
And, a FULL halt of ~20% of the world's LNG supply has taken effect in Qatar.
The bigger problem here is that shutting down oil and gas facilities is not a simple process, particularly when it comes to restarting production.
Once plants shut down, it can take weeks to months for production to ramp back up to full capacity.
The next 24 hours are crucial.
Unless there is intervention, it appears that oil prices are setting up to surge above $100/barrel.
Prepare for extreme volatility tomorrow.