No. of Recommendations: 3
Oil inventories are being held up by the exhaustion of strategic reserves...once those go, the price per barrel will zoom up to $150. At that point Trump has to pretty much fold:
https://www.indexbox.io/blog/exxonmobil-vp-warns-o...Speaking at the Bernstein Conference in New York on a Thursday, Chapman stated that crude oil prices could reach $160 per barrel in the coming weeks as reserve inventories reach their lowest point. He described current inventory levels as unprecedented and very low, noting that once those low levels are hit, prices will surge. Chapman attributed the recent period of lower prices to the release of strategic petroleum reserves by multiple Western nations. Oil at $150 a barrel is game over.
Chapman explained that commercial inventories of crude oil, gasoline, diesel, and jet fuel have all been depleted, and that releasing strategic petroleum reserves has helped mitigate the impact on prices. He warned that the dated Brent crude benchmark, a key global price reference, would climb to $150 or $160. He noted that crude oil has been trading between $90 and $110 for roughly six weeks, which he said was only possible due to running down inventories, adding that this cannot continue indefinitely. And China hasn't entered the chat yet:
https://x.com/jackprandelli/status/205884537323008...China's crude imports just collapsed from 12,000 kbd to 6,500 kbd.
The oil shock hasn't happened yet because China hasn't come back to buy.
Chinese refiners stepped back.
High prices, weak margins, no incentive to buy.
But inventories are now drawing down faster than run cuts. The buffer is shrinking.
When state refiners return to market and they will they won't be topping up. So figure 2-3 more weeks-ish and then Trump has to throw up his hands and walk away.
No. of Recommendations: 6
Oil inventories are being held up by the exhaustion of strategic reserves...once those go, the price per barrel will zoom up to $150. At that point Trump has to pretty much fold:
One might assume so. However, Trump has made a great display of being indifferent to the impact of higher oil prices. Or at least cultivating the appearance of being indifferent.
He's also indicated he believes that Iran is desperate to reach a deal. It doesn't seem to affect his position (at least the one he asserts in public) that many of the things that were expected to force Iran to cut a deal with us haven't yet worked. Killing their leadership didn't cause them to fold. Blowing up their navy and airforce and some (but only some) of their missile capacity didn't get us what we wanted. The blockade and the ostensible "$500 million per day" losses don't seem to have done anything yet. And obviously Iran's pipelines and wells didn't start to "explode" in early May, as Trump had previously stated they would.
Plus...well, Trump doesn't want to fold and hates admitting defeat. It's anathema to his public image, his political identity, everything about him. He needs for this to have been a success. If it ends up being a failure - and a failure due to something that everyone knew Iran had the power to do - then that's going to be a very bitter pill to swallow.
If he's decided that the midterms are already lost - or that he doesn't care - then he might just stay the course rather than admit defeat. To say nothing of Steve's theory that he wants oil prices to zoom above $150.
No. of Recommendations: 2
Trump has made a great display of being indifferent to the impact of higher oil prices. Or at least cultivating the appearance of being indifferent.
His usual "negotiating" style: everyone else needs him, but he doesn't need them.
-he abuses NATO about not deploying military force to open the Strait, then, in the next breath, says he doesn't need NATO.
-Iran is desperate, but he doesn't care.
Steve
