Oil prices are climbing again. Brent crude is holding above $100 a barrel and US crude is near $90 a barrel. Attacks in the Strait of Hormuz are adding to supply fears. Here to break down what this all means is Ted Parkhill, CEO and Co-Founder of Incline Investment Management. Ted, great to be with you. Welcome back.
Thanks Johnny. Great to be here.
We were here a couple of weeks ago with very similar conversations. What has changed?
Two weeks later, some things have changed, there is a lot of news, a lot of noise. But one of the things I try to emphasise is that we do not trade the news, we do not trade the noise. The real trick for us is to follow the themes. That is a good lesson for a lot of investors — try not to get too worried about the headlines, focus on the big main themes of what is happening, and adjust your portfolio accordingly.
Oil is hovering around $100 a barrel. What is driving prices right now?
It is uncertainty. Markets do not appreciate uncertainty. It is natural for investors to see the headlines and start to panic — that drives markets in the short term. But over the long term we see trends. In the case of oil, Sunday night the war is over, by Wednesday we are bombing or being bombed — there is always the next headline. Everything reverses the next day. So do not be distracted by that. We try to find how markets are trending. If you have the discipline and patience to do that, you will be a much more successful investor over time.
What is actually at the core of the oil situation?
Without the Straits being clear, with Saudi building pipes, with Canada unable to get organised enough to build a pipeline — there are supply constraints. Global uncertainty is certainly driving oil prices. One good thing about oil at $100 — the standard oil contract is 1,000 barrels, so you control $100,000 worth of oil in one contract. The math is easier. But what is driving prices is that pure uncertainty of not knowing what happens next. When there is uncertainty, prices get driven up.
Higher oil is pushing borrowing costs globally. Countries like France are being hit hardest — yields at their highest in 20 years. What is going on?
There is a lot going on in France that is not good. But from our perspective, this is just another indication that the main theme continues — rates are ticking up globally. It is not just France. Look at Japan, Germany, the UK, here in the US — yields are increasing across the board. Bond prices tend to fall in a rising rate environment. That is exactly where we remain. And as a systematic trader, we can actually trade that trend. When was the last time your adviser told you to be short bonds — much less short global bonds? It just is not normal advice. But the opportunity in the bond market right now is being short bonds. Investors should look for managers that can give them access to that trade.
How are high oil prices hitting the average American wallet?
Directly. Oil is a big part of everyday consumption and we are all feeling it. Coffee is down on the year — has your coffee shop gotten cheaper? No. Prices remain elevated. The key theme is energy prices are up. So if you have that exposure you are making money as energy rises — and if you are making money on rising energy prices, you are not as worried about filling your car. Try and offset what is going on by being invested in the thing that is going up.
What do you see heading into year-end?
As a trend follower, we are not making predictions. But the key themes of 2026 seem to be persisting. Strength of the US dollar. Being short global bonds in a rising rate environment. And long equities — equities remain strong, and the question is if and when they ever soften up. I would caution investors that the strength of equities is not as broad as some people think. The AI trade is still driving the index. Stay long as long as it remains elevated, but start looking at diversification — truly non-correlated assets. I am pounding the table on that right now. And be careful — private credit and private equity are not really alternative. Those are just private markets of asset classes you probably already own. Make sure you are adding the right types of alternatives.
Thank you so much for joining us Ted.
Great honour. Thank you very much.
