ELAM: Desperate for a Deal, but the Market Isn’t Buying It
West Texas Intermediate crude tumbled to $75.98 a barrel on Tuesday, down from $84 last week and sharply below the $78 open seen Monday. The swift move was enough for analysts to pull back recommendations on energy and oilfield services stocks, a rare acknowledgment that the trade has become more headline-driven than fundamentals-driven.
Even Chevron and ExxonMobil, fresh off some of their best quarterly results in years, traded lower. Producers were broadly red across the board, while a handful of energy service names managed gains—an odd split that suggests the market is still trying to figure out which part of the sector benefits from a potential de-escalation in the Middle East.
Behind the whipsaw is a White House in a hurry. Trump ran in 2024 on a promise of sub-$3 gasoline, and with midterm elections approaching, an affordable pump price has become an urgent political goal. The trouble is that the administration’s own foreign-policy posture has added a war premium to crude, and the president’s demands are running into the realities of the oil market.
The timeline of this week alone shows how chaotic the back-and-forth has been. Last Friday, Trump was in full attack mode against Iran. By Saturday evening, he reversed course, saying Saudi Arabia had asked for a respite. On Sunday, he announced further talks with Iran, promising yet another deal. Then at 6:32 a.m. CST on Monday, Iran denied that any negotiations were taking place with the United States. Oil, which had opened around $78, recouped to $80 by the close.
Trump took to Truth Social to demand that Chevron lower gasoline prices despite the company’s record profits. The request reflects a fundamental misunderstanding of how retail fuel pricing works, but the political message was clear. The irony is not lost on energy analysts: the industry profits that Trump is criticizing have been driven in large part by the same Middle East tensions his administration has escalated.
Iran continued to deny negotiation efforts even as Treasury Secretary Scott Bessent—an unusual voice in this diplomatic mix—declared Tuesday that a Hormuz deal was only a day or two away. The conflicting signals have left traders wary. A genuine agreement would likely pull crude sharply lower, but a collapse in talks could send prices spiking again just as quickly. With inventories already tight, the margin for error is thin.
Outside energy, equity markets are exhibiting a peculiar type of exuberance. All major indexes are climbing, led by tech, with companies piling into billions of dollars in debt offerings tied to artificial-intelligence spending. The vertical rise after an extended bull market is a divergence that has historically preceded major tops—seen before the October 1987 crash, the March 2000 dot-com peak, and the autumn 2007 high. That does not mean the current rally is over, but it does argue for caution.
For traders, the crosscurrents are getting difficult. Energy is being buffeted by geopolitics and domestic politics, while tech prices increasingly reflect perfection. The prudent play may be to trim positions, tighten risk, and wait for the next policy headline—because this cycle, there’s always another one coming.
This article originally appeared in the Odessa American.