Post from earlier today:
https://www.reddit.com/r/wallstreetbets/s/1d47ZtbT6V
To everyone who thought a magical diplomatic off-ramp was going to drag the front end of the curve down to meet the deferred months: I hope you enjoyed the delusion while it lasted.
Take a look at the prints today. The market is finally waking up to the structural deficit I outlined previously, and the institutional capitulation is happening violently, right on schedule.
Jun '26 Contract: Ripped to $122.15, up a massive +10.89 (+9.79%) in a single session.
Jul '26 Contract: Trailing right behind at $113.44, up +9.04 (+8.66%).
The paper traders are officially in panic mode. That nearly $9 spread between just the June and July contracts tells you everything you need to know about the physical market right now.
The "convenience yield" is going parabolic because refiners are absolutely desperate for immediate delivery, and the barrels simply \*do not exist\* as long as Hormuz remains bottlenecked.
When I said my strategy was "Unhedged Torque," this is exactly the macro dislocation I was positioned for. If you think a levered portfolio heavily weighted in offshore drillers (VAL, SDRL, NE) and mid-cap E&Ps was printing free cash flow at $90 oil, imagine the cash generation happening at $122. The day rates for drillships aren't just expanding anymore; they are entering a super-cycle.
The most beautiful part of this? The back end of the curve \*still\* hasn't fully re-rated to reflect a multi-year supply constraint. The market is still hoping this ends by Q4. It won't.
For those who refused to accept reality and didn't take advantage of the selloff early this month, enjoy the sidelines. For those riding the unhedged oil wave, the geopolitical risk premium is finally being priced in, and the torque is spectacular.