What if China's oil demand collapses into deep surplus?
A sharp Chinese industrial slowdown swings oil into surplus, but the higher-conviction trade is the metals/FX complex — copper and AUD fall hardest because China is ~55% of copper demand and AUD is the liquid China proxy. Rhymes with the 2015-2016 China hard-landing scare and late-2018 slowdown, which sank copper and the Aussie well before crude. Transmission: Australia/Brazil (iron ore, copper) and Korea/Taiwan (capital goods) are the export funnels into China that get repriced first.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 6–18 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a mixed shock. A sharp Chinese industrial slowdown craters oil demand growth, swinging the market into deep surplus. The trigger decomposes into signed root‑shocks — China growth ▼ · Oil demand ▼ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Freeport (copper) FCX 📈 chart | Equity | ▼ -1.1% hist -0.86–-0.33% · other way -1.24% (n=9) |
| 2 | Copper XCUon Hyperliquid 📈 chart | Commodity | ▼ -0.9% hist -1.7–+0.14% · other way -2.0% (n=9) |
| 3 | China internet KWEBon Hyperliquid 📈 chart | Equity | ▼ -0.8% hist -0.75–-0.14% · other way -2.51% (n=5) |
| 4 | Alibaba BABAon Hyperliquid 📈 chart | Equity | ▼ -0.7% hist -1.03–+1.05% · other way -6.12% (n=5) |
| 5 | WTI crude CLon Hyperliquid 📈 chart | Commodity | ▼ -0.5% hist -0.59–+0.4% · other way -7.49% (n=9) |
| 6 | Aussie dollar AUD 📈 chart | FX | ▼ -0.5% hist -0.55–-0.09% · other way -1.68% (n=7) |
| 7 | Chinese yuan CNY 📈 chart | FX | ▼ -0.5% hist -0.38–-0.1% · other way -0.67% (n=9) |
| 8 | Energy sector XLEon Hyperliquid 📈 chart | Equity | ▼ -0.3% hist -0.26–-0.07% · other way -1.63% (n=9) |
| 9 | United Airlines UAL 📈 chart | Equity | ▲ +0.3% hist -0.63–+1.67% · other way +26.85% (n=7) |
| 10 | ExxonMobil XOM 📈 chart | Equity | ▼ -0.3% hist -0.45–+0.05% · other way -0.55% (n=12) |
| 11 | Delta DAL 📈 chart | Equity | ▲ +0.3% hist -0.83–+2.2% · other way +16.49% (n=7) |
| 12 | Chevron CVX 📈 chart | Equity | ▼ -0.2% hist -0.71–+0.19% · other way -2.03% (n=12) |
| 13 | Turkish lira TRY 📈 chart | FX | ▼ -0.2% hist -0.68–+0.17% · other way +0.98% (n=7) |
| 14 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -0.38–+0.06% · other way +0.5% (n=9) |
Probable recommendation
Why we may diverge from history
Trust the cascade short on FCX: +1.6% over n=12 is noise, and the analogues (Bitcoin crash, Evergrande, yuan-low) are off-channel — a China industrial collapse hits copper directly; history is uninformative.
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| Gold XAU | LONG | +1.4% · 5d +0.2% | 64% | 40 | 0.25 | · |
| XCU XCU | SHORT | -1.1% · 5d -0.7% | 62% | 40 | 0.21 | ✓ matches cascade |
| 10y yield DGS10 | SHORT | -4bp · 5d +1bp ↺ fades | 63% | 40 | 0.21 | · |
| KR200 KR200 | SHORT | -0.6% · 5d -0.8% | 63% | 40 | 0.20 | ✓ matches cascade |
| XPD XPD | SHORT | -2.5% · 5d -2.1% | 62% | 40 | 0.19 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -2.4% · 5d -4.3% | 61% | 33 | 0.19 | · |
| XPT XPT | SHORT | -0.3% · 5d +1.2% ↺ fades | 59% | 40 | 0.16 | ✓ matches cascade |
| KWEB KWEB | SHORT | -0.3% · 5d -1.3% | 57% | 34 | 0.14 | ✓ matches cascade |
| Volatility VIX | SHORT | -2.6% · 5d +0.1% ↺ fades | 58% | 40 | 0.14 | · |
| CNY CNY | SHORT | -0.1% · 5d -0.1% | 55% | 40 | 0.09 | ✓ matches cascade |
| XLE XLE | SHORT | -0.1% · 5d -0.3% | 55% | 40 | 0.09 | ✓ matches cascade |
| US dollar DXY | LONG | +0.4% · 5d -0.0% ↺ fades | 55% | 40 | 0.08 | · |
| DAL DAL | LONG | +2.0% · 5d +0.3% | 53% | 40 | 0.06 | ✓ matches cascade |
| CVX CVX | SHORT | -0.6% · 5d +0.0% ↺ fades | 52% | 40 | 0.04 | ✓ matches cascade |
Why this probability
China slowdown ongoing but deep-surplus demand collapse less likely with stimulus props. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.