- Joined
- Nov 4, 2017
Not at all. I am buying the dip. Everytime the market freaks I buy in and make money.
I also bought a bunch of COP based on Venezuela in January and that shit is printing, and bunch of defense stonks right before Midnight Hammer and that shit is going to the moon.
Depends on what you consider "normal".
From oil wonks I have seen and from talk about previous issues with Suez and such and estimated impact from Houthis/12 days war:
To tl;dr: you are seeing "panic buying" right now. You cannot just start and stop a refinery. Shutdown takes awhile, starting up takes a while, and this costs money so what you are seeing currently is a bidding war as operators bid and are willing to pay a premium to buy oil to keep their refineries going; prices are sky-high becasue paradoxically, operators expect this to not last very long and are trying to buy enough oil to avoid shutting down their refineries.
If disruptions and short supply was expected to persist for a while, the operators would eat the cost to shutdown refineries and the ppb would be much more modest.
Additionally, the skyward trend on oil is triggering panic buying for places like China, India, Japan, and European refineries that do not have sufficient stable oil supplies (i.e. Domestic production) to meet even a reasonable fraction of domestic need; they are likely being ordered by governments or governments acting themselves to secure supplies because they are not informed on the market and only see the price spike and are panic buying; this makes the price spike higher and triggers more panic buying. Like toilet paper during Covid.
If the Strait opens up this weekend in some meaningful way, oil prices will settle back down to 50-60 but we'll probably see what ammounts to $1-5 per-barrel surcharge on output for about the 6 months as ripples are dealt with and producers try to spread the operational hit while remaining competitive.
So Prices will be about what they were before but there will be a cost added to output for a while as operational inefficiencies are felt for a while... so is that normal?
It won't be $80/barrel.
If the straight opens next weekend, we are looking at oil futures well above $100 for a bit, but price per barrel should peak about $100 and might drop slightly as, stated above, producers accept the supply crunch and move to shutter refineries and the demand for crude will drop. There will only be moderate additional impacts for the 3rd weekend - by that point the 20% drop in the supplies of crude will be a fact to be worked around. But figure oil levels out about $80/barrel in April, drops to $60 by june.
If the straight is closed longer than a month however, THEN really unpleasant things to global energy markets start to happen. Most refiners and some nations only have 30-day supplies of oil, and are using that supply to try to "flattern the curve", some may try to sit out the bidding war. So after about 30 days the market for oil buyers will jump, and if the supply hasn't increased..... welll...
(disclaimer: this is a VAST over simplification due to arrival times for tankers, but I'm not going to try to get out the autistic chronology & WoT graphs)
And then at that point everyoen will have to have made hard choices about refinery shutdowns. So this would be a second round of shutdowns and consolidation, one that would hurt even harder. This is when you'd start to see gas lines in third-world countries like Europe.
This is when you'll start seeing prices like its a Democrat in the whitehouse.
But, long term you also must factor in:
Iran's oil infrastructure is not being hit, it is intact. No oil fields ablaze. IF Iran's government topples, and we just see Iran with intact oil infra re-enter the global market, the glut of supply will drop the PPB like a fucking stone. But that depends on what Iran's people do - do they overthrow the government? If they do, is the result years of balkanization and ethnic cleansing, or does a strong figure emerge that unites the country and sees a clean transition of power? Do the mullahs deal with internal decent and manage to come out on top, and if so how long does it take for them pull that off?
There's a lot of questions its far, far too early to try to answer.
Or summarize:
- Oil will be adjusted upward recovering opportunity cost almost certainly until 2027, but if the shutdown is short it'll be a modest increase and taper off neglible by end of summer.
- If Iran's government is replaced by one that is not so retarded it has to be sanctioned, the glut of Iranian oil in the market will push PPB back down to $50 or maybe even $40 by August/September - there will still be an upward pressure on the price of the output due refiners trying to recover operational costs, but there will be so much global oil with Venezuela and Iran back in play, it won't have much of an effect.
- Price at the pump will still suffer, but competition with refiners and gasoline companies will offset that. How much is far too early to tell and depends on too many variables - its increasingly more and more unlikely but a world where the mullahs' retain control of the government is far from impossible.
exactly this. Buy the fucking dip and diversify your bonds, nigga
Department of War: "This will take probably 4-6 weeks to finish up", deploys zero ground troops into the hostile country, continues uncontested demolition of a country on the other side of the globe like its NBD.
Turd-world browns after 7 days: "FUGGING LOL FOREVER WAR AGAIN US LOL. SIX AMERICANS HAVE DIED ITS ALREADY A TOTAL BURGER LOSS AMERICA IS A FAILED EMPIRE TOTAL PETRODOLLAR COLLAPSE. MULTIPOLAR WORLD IS RISING! BROOOOOCS!", pretends Russia taking longer than WWI to invade a neighboring country and losing their strategic bomber fleet to trojan minihomes is not a thing currently happening.
the Eternal Nord strikes again.
