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*                       FIEND'S SUPERBEAR MARKET REPORT                     *

*                                 April 29, 2026                            *

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*                       e-mail: fiendbear@fiendbear.com                     *

*                    web address: http://www.fiendbear.com                  *

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Fiend Commentary
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Oil’s Tight Now, Loose Later Problem

The biggest new headline is the UAE quitting OPEC, but the oil market’s first reaction was a shrug. That sounds odd until you look at what traders are actually pricing.

Right now, the market is saying two things at once:

  • Oil is scarce today
  • Oil may be less scarce later

That is what the futures curve is telling us.

Brent for June delivery was trading around $111.25, while the more active July contract was closer to $104.12. That means buyers are paying a big premium for barrels now versus barrels a month later. Reuters and CME both describe this as backwardation — a setup that usually means immediate supply is tight, but traders still expect some normalization later on. Earlier in the crisis, Reuters noted the gap between front-month Brent and the six-month contract widened to about $10, the steepest backwardation since the Russia-Ukraine war in 2022.

In plain English: the market is panicking about the next few weeks, not the next few years.

That fits the current story. The Strait of Hormuz is still disrupted enough to keep near-term barrels expensive, but traders are assuming the physical blockage, war risk, and shipping chaos will not last forever. CME’s own analysis says the current curve implies the market still sees spot crude potentially falling back into the mid-$70s by year-end if this proves to be a short-lived logistics shock rather than a structural supply break.

The UAE leaving OPEC adds a twist to that story.

In the near term, it does very little because the UAE still can’t magically move a lot more oil while Hormuz is constrained. HSBC told Reuters the Abu Dhabi pipeline that bypasses Hormuz is probably already near full use. But once shipping normalizes, the UAE will no longer be bound by OPEC+ quotas and could gradually lift production from around 3.4 million barrels per day toward 4.5 million. That doesn’t flood the market overnight, but it does weaken OPEC’s long-term discipline and makes it harder for the cartel to keep prices high once the crisis cools.

So how long does this tight market last?

My read is straightforward:

  • Below $70 by year-end: possible, but not the base case. That probably requires a real reopening of Hormuz, a clear de-escalation in the war, and weaker global demand all at once. I’d call that the lower-probability outcome.
  • Back to the $80s: this is the most plausible path if the conflict cools but doesn’t fully “solve,” and if UAE/OPEC dynamics start to loosen supply later in the year.
  • Stuck in the $90s into year-end: possible if the Strait remains unreliable into summer and insurance/shipping costs stay elevated even without a complete closure.
  • Back above crisis highs: that needs a fresh escalation, not just a long stalemate.

The World Bank’s new commodity outlook sits right in the middle of this logic: its baseline assumes the worst disruptions fade after May and shipping gradually returns toward pre-war levels by October, yet it still sees Brent averaging about $86 in 2026—much higher than last year’s $69. And if the conflict persists or deepens, it says Brent could average $115 this year. That’s not a forecast for collapse in oil. That’s a forecast for a world where energy stays expensive enough to keep inflation uneasy.

That brings us to the bond market.

The 30-year Treasury has been creeping back toward 5%, and the 10-year is still above the key 4.23% zone that Reuters’ technical analysis flagged as the level that favors higher yields. When long yields stay elevated even as traders talk about possible Fed cuts later in 2026 or early 2027, the bond market is basically saying: “Fine, maybe you cut—but inflation and deficit risks are not going away.”

That is why oil matters so much here. If the Fed cuts later while oil and shipping keep prices sticky, the long end can do the “tightening” for them. That’s the bond vigilante version of discipline.

Bottom line:
The oil market is not pricing a permanent shortage. It is pricing a severe near-term squeeze followed by a gradual easing later. That is why the front month is so expensive and the back months are not. The real risk is that traders are still too optimistic about how quickly “later” arrives. If Hormuz stays messy into summer, the market may have to reprice the whole curve higher—and that would make the move toward 5% in the long bond feel a lot less like noise and a lot more like a warning.

                                                                                          

 

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