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Falsified
Jul 6, 2026
We Were Wrong On Oil — Marking It
Saudi Arabia reportedly cut the August selling price of Arab Light crude to Asia by $11 a barrel — the biggest cut in over 20 years — while OPEC+ is raising output. The oil price leg is falsified.
THE SIGNAL
Saudi Arabia reportedly cut the August official selling price of Arab Light crude to Asia by $11 per barrel, pricing it at Oman/Dubai minus $1.50. The report described it as the biggest cut in over 20 years. OPEC+ also agreed to raise output targets from August.
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2026-07-06
THESIS CONNECTION
A real shortage keeps prices high and the futures curve steeply backwardated. Instead, prices are falling and Saudi is cutting aggressively into Asia. Cleaner read: the U.S. and Gulf producers are re-integrating supply faster than the war disrupted it, keeping oil cheaper and the dollar system stable. Cheap oil also feeds a softer inflation print, which cuts against the higher-for-longer rates case elsewhere in the framework.
WHAT TO WATCH
- WTI likely tests $65 in the next 30-45 days if this holds.
- July 14 CPI: does cheaper energy show up as a soft print?
- Whether structural Hormuz damage — insurance, slower transit, routing delays — still leaks into costs with a lag.
- Whether OPEC+ actually delivers the added barrels or just announces targets.
⚡ Oil price leg confirmed falsified in V8.