A single investment story can suck all the air out of the room...
For most of 2025, one of those stories has been tariffs. They've rocked the markets and the economy this year... They're practically the only thing folks are talking about.
Still, there are plenty of other stories worth paying attention to right now...
One is energy prices. Specifically, crude oil prices have crashed this year. And now, sentiment is hitting hated levels.
That means a reversal is likely. And we could see $100-per-barrel oil much sooner than anyone believes possible...
In normal times, a crash in crude oil would be a major story. But today, it's getting lost in the sea of constantly shifting tariff news.
We've seen a huge decline in oil prices in recent years. In the summer of 2022, oil prices soared above $120 a barrel. They recently dropped below $60 a barrel for the first time in years.
That's a 50% decline in roughly three years. And in 2025 alone, the peak-to-trough decline reached nearly 30%.
Traders Are Betting on a Continued Drop in Oil
After this painful drop, traders are all-in on lower oil prices. We can see it by looking at the Commitment of Traders ("COT") report...
This weekly report shows the real-money bets of futures traders. When these folks all agree, they tend to be wrong... So we can use extreme COT readings as contrarian signals.
Right now, traders are about the most negative they've been on oil in the past 12 years. Take a look...
As oil prices fall, traders assume they'll keep falling. But eventually, sentiment gets overdone... And when there's no one left to sell, prices reverse.
I've highlighted a handful of these moments in the chart above. They all mark major sentiment lows based on the COT report. And they were all periods where oil prices reversed and moved much higher.
Look at the oil return in each case...
These oil setups led to an average rally of 72% in about six months.
Those are massive short-term returns. Even if we don't count the COVID-19 pandemic bottom (which is quite an outlier), the average return is still 45% over seven months.
Either way, the signals tend to unfold near bottoms for oil prices. And given the drastic decline we've already seen, a major reversal is likely soon.
Again, when traders all agree, we want to do the opposite.
History shows oil could easily shoot back above $80 a barrel in the months ahead. And while it seems impossible today, $100-per-barrel oil could be a reality at some point in the next year.
Good investing,
Brett Eversole
Further Reading
The White House is committing millions of dollars to prioritize nuclear power. That means we could be entering the biggest nuclear energy boom of the past 50 years – and investors are just waking up to the opportunity.
"Doomscrolling gives us all sorts of reasons to not invest," Pete Carmasino writes. If you focus on the negative headlines, you might want to sit on the sidelines. But keeping your money out of the market means missing out on some excellent opportunities, if you know where to look.
