Commodities: Oil
Probably a stock out of left field – but with a positive catch. Not many microcaps with $100m market cap have a recent history of generating real revenue, real cashflow, pay taxes and make a net profit. They operate and 63% own a single gas producing onshore well in Italy. They have 4 near term onshore wells going through regulatory processes with a Government very positively attuned to increase local gas production. They also have an offshore permit for a shallow water gas field close to infrastructure.
A very clean balance sheet with cash in bank and short-term Italian Gov’t bonds well ahead of total liabilities and are likely to fund the onshore new wells without extra borrowing or capital raise.
The share price has moved up 50% in the last month but welcome your quick evaluation whether further upside likely. I am a holder with a position acquired in July.
The chart of WDS shown below is one that’s concerned us in recent months, i.e. it’s bullish suggesting oil will remain firm, stoking inflation, weighing on rate-sensitive stocks. Both charts shown on the energy sector today suggest oil prices will be higher for longer, but of course with plenty of volatility along the way.
Oil has been one of the drivers of the troublesome bond market in 2026 and while their correlation is not perfect it adds to the bearish sentiment when US-tensions rise – akin to kicking a dog when its down. The Fed, RBA et al might still need to hike rates in 2026 if oil retreats into Christmas but it feels like they almost definitely will if the conflict escalates further and fuel prices increase from current levels – there in lieth the issue, who’s actually driving this particular train?
The US-Iran conflict shows no sign of abating and we feel last week’s move by the US Treasury is an attempt to deal with the impact from soaring oil prices, a pivotal tailwind for inflation that Donald Trump and Washington is failing to control, i.e. if you cannot control to headline problem, attempt to control the knock-on effects.
The US-Iran conflict shows no sign of abating as Lebanon saw its deadliest day of fighting in months over the weekend, loading further pressure on stalled US-Iran negotiations while Washington preps fresh sanctions. The oil price has opened flat on a wet Monday morning in Sydney.
If you were to build a portfolio of 5 ASX resources stocks (across base metals, precious metals and energy) what would be your highest conviction picks right now and why. Can be large cap and small caps.
This morning oil is likely to open slightly higher after Iran rejected US peace talks although the latest round of rhetoric was noticeably less hostile than in recent weeks. Hedge funds have cut net-long Brent and WTI positions to a three-to-four week low in August, with short-only positions rising to their highest in four weeks: with professional traders no longer positioned aggressively bullish heading into this week it feels like the “smart money” is looking elsewhere for the next big thing.
Crude has opened down ~5% this morning on “less bullish” news: OPEC+ approved another +188,000 b/d quota increase for September, the sixth consecutive monthly hike, completing the full unwind of the 1.65 million b/d voluntary cuts made in 2023, and President Trump announced on Sunday he was cancelling planned new strikes on Iran after Tehran and regional powers indicated they are working toward a deal to reopen the Strait of Hormuz.
The OOO ETF provides investors with exposure to the price of West Texas Intermediate (WTI) crude oil through futures contracts, offering a simple way to gain direct exposure to movements in global oil prices without directly owning physical oil, or the risks that come with specific stocks. The fees of 0.69% aren’t cheap, but the ETF is FX hedged, which has seen it outperform the S&P GSCI Crude Oil Index Excess Return Index (USD) by ~5% so far in 2026.
July has witnessed a dramatic re-escalation of the Iran conflict with markets going from too optimistic to hopefully too pessimistic. The ceasefire breakdown has actually driven the sharpest leg of the oil price rally, making the resilience by equities so far pretty impressive. Things improved on Friday and over the weekend but we’ve heard it all before:
