--- title: "Exclusive: Don’t Buy Crude ETFs for the Refining Crunch—Veteran Trader Warns of a ‘Temporary Crude Surplus’" type: "News" locale: "en" url: "https://longbridge.com/en/news/293210924.md" description: "Veteran trader Baron Lamarre warns against buying crude ETFs like USO and BNO, citing a temporary crude surplus despite record refining margins. Experts suggest targeting individual refiners such as Phillips 66 and HF Sinclair to capture product shortages, noting that futures-based ETFs face contango risks. Lamarre outlines price scenarios for Brent and WTI, while Louis Navellier projects temporary war-driven spikes." datetime: "2026-07-20T11:51:14.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293210924.md) - [en](https://longbridge.com/en/news/293210924.md) - [zh-HK](https://longbridge.com/zh-HK/news/293210924.md) --- # Exclusive: Don’t Buy Crude ETFs for the Refining Crunch—Veteran Trader Warns of a ‘Temporary Crude Surplus’ Despite historic refining margins and 10% of global capacity sitting offline, former Petronas trader **Baron Lamarre** warns that a “temporary crude surplus” makes ETFs like **United States Oil Fund, LP** (NYSE:USO) and **United States Brent Oil Fund, LP** (NYSE:BNO) poor plays right now. Instead, experts suggest targeting individual refiners to safely capture the product shortage. ## **Disconnect Between Crude and Crack Spreads** The U.S. 3-2-1 crack spread recently hit a record $64 per barrel with ~8 million bpd offline, yet raw crude prices have failed to match that downstream boom. A ‘crack spread’ is the gross profit margin an oil refinery earns by breaking down—or ‘cracking’—crude oil into refined petroleum products like gasoline and diesel. Lamarre, co-founder of the International Digital Exchange (INDEX), attributes this to a fundamental divergence: "This looks more like a temporary crude surplus running into a genuinely separate product shortage, rather than tight refining capacity dragging crude prices up with it." Consequently, Lamarre cautions against using broad commodity funds to trade the refining crunch: "I wouldn’t lean too hard on the refining story as a support factor for something like USO or BNO specifically." **Read Also: Elon Musk Says Economy Will Be Measured in Energy, Not Money, as SpaceX Eyes Orbital Solar Power** ## **The Case for Individual Refiners** Navellier & Associates founder **Louis Navellier** agrees, explicitly advising traders to “prefer individual stocks” like **Phillips 66** (NYSE:PSX) and **HF Sinclair Corp.** (NYSE:DINO). Lamarre echoes this, noting record margins provide a “much cleaner tailwind” for refiners than crude trackers. Furthermore, Lamarre and Bitunix analyst **Dean Chen** warn that futures-based ETFs face contango risks that can “quietly eat into returns” through “negative roll costs.” Lamarre emphasizes USO and BNO are “tactical vehicles right now, not buy-and-forget.” ## **Lamarre’s Crude Price Scenarios** Emphasizing a wide-band outlook over tight forecasts, Lamarre outlines four crude scenarios: - **Baseline Range:** Brent $80–$100 and WTI $76–$95. - **Near-Term Escalation:** If Hormuz disruptions hold, Brent could test $100 and WTI mid-$90s. - **Full Chokepoint Closure:** A total Strait shutdown could push crude to $110–$120. - **De-escalation:** Normalizing flows could ease Brent to $75–$90 and WTI to $70–$85. Navellier maintains war spikes will be “temporary,” projecting WTI to peak “up to $82 per barrel” through Labor Day. ## **Price Action in Crude and Related Instruments** At the last check, Crude Oil WTI Futures were down 0.61% at $81.28, and Brent Oil Futures were 0.05% lower at $88.06. Meanwhile, USO closed 3.91% higher on Friday, and it was down 0.25% in the premarket on Monday. Similarly, BNO closed 4.10% higher at $48.70, and it was 0.11% higher in the premarket on Mnday. **Read Also: Donald Trump Jr. Says Oil Futures Under $70 Thanks To His Dad's Iran Deal: 'Lower Gas Prices Coming For Americans'** **_Disclaimer:_** _This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors._ _Photo by Castleski via Shutterstock_ ### Related Stocks - [DINO.US](https://longbridge.com/en/quote/DINO.US.md) - [PSX.US](https://longbridge.com/en/quote/PSX.US.md) - [BNO.US](https://longbridge.com/en/quote/BNO.US.md) - [USO.US](https://longbridge.com/en/quote/USO.US.md) - [UCO.US](https://longbridge.com/en/quote/UCO.US.md) - [XLE.US](https://longbridge.com/en/quote/XLE.US.md) - [VDE.US](https://longbridge.com/en/quote/VDE.US.md) - [IXC.US](https://longbridge.com/en/quote/IXC.US.md) - [XOP.US](https://longbridge.com/en/quote/XOP.US.md) - [IEO.US](https://longbridge.com/en/quote/IEO.US.md) - [IEZ.US](https://longbridge.com/en/quote/IEZ.US.md) - [OIH.US](https://longbridge.com/en/quote/OIH.US.md) - [XES.US](https://longbridge.com/en/quote/XES.US.md) - [PXJ.US](https://longbridge.com/en/quote/PXJ.US.md) - [CRAK.US](https://longbridge.com/en/quote/CRAK.US.md) - [ERX.US](https://longbridge.com/en/quote/ERX.US.md) - [ERY.US](https://longbridge.com/en/quote/ERY.US.md) - [DUG.US](https://longbridge.com/en/quote/DUG.US.md) - [MLPA.US](https://longbridge.com/en/quote/MLPA.US.md) ## Related News & Research - [Phillips 66 Sees Global Refining Capacity Normalization Taking Longer Than In 2022](https://longbridge.com/en/news/294996777.md) - [Phillips 66 Cashes in on Refining Boom Sparked by Middle East Supply Disruptions](https://longbridge.com/en/news/294996784.md) - [W.Africa Crude - India snaps up WAF](https://longbridge.com/en/news/294988087.md) - [Indian refiners buy Middle East and West African crude, sources say](https://longbridge.com/en/news/294931855.md) - [Top HF Sinclair Executive Makes Major Move With Fresh Stock Sale](https://longbridge.com/en/news/295176237.md)