24H | Oil Stocks & ETFs Jump. Battalion Oil Soars 17%; Indonesia Energy up 10%; US Energy up 5%; Occidental up 4%; UCO, USO up over 3%

Oil stocks and ETFs jumped in overnight trading as brent crude advanced 3% to $116 a barrel.

Battalion Oil soared 17%; Indonesia Energy up 10%; Sable Offshore up 7%; US Energy up 5%; Occidental up 4%; UCO, USO up over 3%.

Israel struck Tehran anew Sunday and Saudi Arabia intercepted almost a dozen drones, a day after Yemen-based Houthi militants entered the war. About 3,500 additional US troops arrived in the Middle East, underscoring the risk of further escalation.

“This escalation raises the odds that this war is going to last longer than investors were thinking and thus that oil prices will remain very high,” said Matt Maley, chief market strategist at Miller Tabak + Co. “We should expect more weakness in the markets.”

Oil may hit a record $200 a barrel if the Iran war drags on until June, with the Strait of Hormuz staying shut, Macquarie Group Ltd. warned. A conflict that stretches through the second quarter would result in historically high real prices, analysts including Vikas Dwivedi said in a note, outlining a scenario with odds of 40%. An alternative outlook, with a probability of 60%, suggested the war may finish at the end of this month, they said.

Almost nothing in the standard defensive toolkit has worked for investors to stall declines spurred by rising energy and its impact on inflation expectations. At least three of the four asset classes at the core of a diversified portfolio have fallen in unison for four straight weeks, matching the longest such stretch since May 2022.