By Avi Salzman

U.S. crude oil has surged some 47% since the war in Iran began. But there's also a growing trade in the other direction. Short interest in the United States Oil Fund, an exchange-traded fund (ticker: USO) that allows traders to bet on the direction of oil prices, has risen by some three million shares, or 50%, in the past month, according to data and analytics firm S3.

USO holds West Texas Intermediate crude oil futures contracts, along with swaps and cash instruments. WTI crude traded down 5.3% this past Monday to $93.50 a barrel after Trump administration officials said they were working on solutions to high oil prices. By Friday, WTI was at $98 a barrel.

Banks have raised oil price expectations, but few expect oil to rise above $100 a barrel for a prolonged period, though that could change if the Strait of Hormuz stays closed. S3 says the increase in short interest doesn't mean oil is about to fall. "The build in short exposure during a strong price advance suggests traders are positioning against the momentum, a setup that often increases volatility as positioning becomes more crowded," the firm warns. It may also mean traders are hedging their risk -- offsetting long positions with short ones to ensure they don't incur big losses if oil reverses.

There has already been extreme volatility. On March 9, oil traded in its widest range since the depths of the pandemic, fluctuating $38 in a single day.

Write to Avi Salzman at avi.salzman@barrons.com

Last Week

Markets

As the week began, the Strait of Hormuz remained the focus. Iran offered China safe passage, and President Donald Trump threatened NATO if European countries didn't help clear the strait; no major allies joined the effort. Brent crude topped $100 a barrel. U.S. stocks rallied as the Federal Reserve began to meet. The call: no change in interest rates. Attacks on Gulf energy facilities escalated, and oil and gas prices rose again. Stocks fell for the fourth straight week, with the Dow Jones Industrial Average down 2.1%; the S&P 500, 1.9%; and the Nasdaq Composite 2.1%.

Companies

Meta Platforms planned layoffs affecting as much as 20% of its head count. Nvidia CEO Jensen Huang predicted $1 trillion in AI chip sales over the next few years and said the company was expanding its autonomous-driving ecosystem with Uber Technologies and a number of Asian car makers. Microsoft mulled legal action over a $50 billion cloud deal between Amazon.com and OpenAI. Banks led by JPMorgan Chase halted a $5.3 billion debt deal for private-equity-backed software company Qualtrics, but began selling $15 billion of debt to finance Electronic Arts' buyout. Arizona sued prediction company Kalshi for operating as an unlicensed gambling company.

Deals

Italy's UniCredit said it would raise its stake in Germany's Commerzbank, triggering a $40 billion takeover bid... Mastercard agreed to buy stablecoin start-up BVNK for $1.8 billion... Unilever is in talks to sell its food business to McCormick.

Next Week

Tuesday 3/24

ADP releases its National Employment report for the four weeks ending on March 7. In February, private employers added an average of 9,000 jobs per week according to ADP's NER Pulse. Despite a soft labor market, there has been massive repricing of the future path of the federal-funds rate away from interest-rate cuts since the end of February. Traders had expected two to three quarter-point cuts by year end but now see no cuts at all, with even a 33% chance of a rate hike by October.

Much of this is due to the concerns about the inflationary impact of the Iran war, which has caused oil prices to jump about 50% since it began. But it's also due in part to Fed Chair Jerome Powell saying this past week that he would be staying on the Federal Reserve Board of Governors until the Department of Justice's investigation into him "is well and truly over, with transparency and finality." Many had expected Powell to leave the board when his term as Fed Chair ends on May 15. Powell also said he'd stay on as Fed Chair if his potential successor, Kevin Warsh, isn't confirmed by the Senate when Powell's term ends.

S&P Global releases both its Manufacturing and Services Purchasing Managers' Index for March. Consensus estimate for the Manufacturing PMI is a 51 reading, while the Services PMI is expected to come in at 51.5. This compares with readings of 51.6 and 51.7, respectively, in February.

The Numbers

4

Estimated U.S. homicide rate per 100,000 people in 2025, down 20% from 2024, below 2014's recent low.

557%

The rise in prices of tungsten, a key component in electronics and aerospace, since February 2025.

50%

The amount of U.S. leased space in 2025 for service tenants, led by gyms and spas, over goods, a first.

$180

Saudi projection of the price of a barrel of oil if disruptions in the Strait of Hormuz continue through late April.

Write to Robert Teitelman at bob.teitelman@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 20, 2026 20:05 ET (00:05 GMT)

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