Oil
This year, we once again present our 2026 outlook as a retrospective from the future – a future in which the AI boom turned to bust.
Next week, please join me for a Webcast on Wednesday, December 17 at 10:30 AM EST (3:30 PM GMT, 4:30 PM CET) to discuss the economy and financial markets. We will also host a Webcast for APAC on Tuesday, December 16 at 8:00 PM EST (9:00 AM HKT+1 day).
And with that, I will sign off for the year. I wish you and your loved ones a very happy and healthy 2026. We will be back on Friday, January 2 with our MacroQuant Model Update.
Commodity market analysis usually focuses heavily on supply-demand balances. Yet in this framework piece, we argue that reported balances are an overrated gauge of underlying commodity price trends.
MacroQuant remains tactically overweight equities, favors an above-benchmark duration stance in fixed-income portfolios, remains bearish on the US dollar, and is bullish on gold.
US intervention will likely force out Maduro from Venezuela and reopen the economy. This could increase Venezuelan crude production in the long run, a modestly bearish outcome for oil markets over cyclical and structural horizons.
MacroQuant is tactically overweight equities, favors an above-benchmark duration stance in fixed-income portfolios, remains bearish on the US dollar, and is bullish on gold and copper.
US restrictions on Russian crude exports could disrupt global oil supplies and trade flows over the near term. However, they are unlikely to have a meaningful impact on crude prices over a cyclical timeframe. Stay short Brent.
In this Q4 Strategy Outlook, we discuss where we stand on our recession call, the outlook for stocks and bonds in various scenarios, why investors are misunderstanding the impact of AI on corporate profits, whether the US dollar has entered a structural downtrend, our perspective on the yen, gold and other commodities, and much more.
We remain cyclically short Brent but are tightening the stop loss to $73/bbl to guard against a geopolitics-driven upside break.