November 6, 2025 – Brent crude collapsed 7.2% to $59.40/bbl today, the lowest since 2021, after OPEC+ shocked traders with a 1.2 mn b/d supply hike starting December.
What Just Happened
OPEC+ Accelerated Plan
- Original: +411k b/d monthly from Jan
- New: +1.2 mn b/d immediate flood
- Saudi: “We take market share back”
Trump Tariff Threat
Trump promised 60% tariffs on Chinese goods → China oil demand -800k b/d in 2026 (Goldman estimate).
Winners & Losers
| Sector | Move Today | 2026 Target |
|---|---|---|
| XLE (Energy) | -6.8% | $72 |
| USO | -7.1% | $55 |
| Airlines | +4.2% | Delta $85 |
| Refiners | +9.1% | VLO $180 |
Refiner Margin Explosion
Crack spreads hit $38/bbl (+62% in 48h).
Marathon Petroleum Q4 guidance: EBITDA +$2.4 bn.
Investment Plays
Short Oil / Long Refiners
- Short USO Dec $75 calls (pay 0.80)
- Long VLO Jan 2027 $200 calls
- Pair: Long XOP (+small caps) vs short XLE
Airline Basket
30% UAL / 30% DAL / 20% LUV / 20% AAL
→ +28% move if oil stays sub-$60.
Shale Bankruptcies Coming
Buy distressed debt: WHD 2026 bonds @62¢ for 45% YTM.
Supply/Demand 2026
| mb/d | |
|---|---|
| Supply | +2.8 |
| Demand | +0.9 |
| Surplus | 1.9 mn |
IEA: “Inventory builds largest since 1998.”
Bottom line: $45 oil base case by March. Load refiners, airlines, and shipping. Energy stocks dead money for 24 months.