Below are some of the most interesting things I came across this week. Click here to subscribe to our free weekly newsletter and get this post delivered to your inbox each Saturday morning.
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Many have wondered lately, given that the closure of the Strait of Hormuz is the greatest disruption of energy supplies in modern history, why are oil prices not higher? As The Financial Times reports, “The United States has responded by cranking up exports, while China has slashed imports.”
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Even with this historic level support, however, “inventories in the Organisation for Economic Co-operation and Development could reach ‘operational stress levels’ early next month,” reports Bloomberg.
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David Rosenberg concludes, “There is still a pervasive belief that this war will end soon, and that once it does, oil prices will retreat. I think that is where the surprise will be: over the next three months, oil prices may continue to hit new highs.”
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How High? “We are now entering week 12 of this crisis and Cornerstone is estimating a 14.4 million barrels per day output forfeiture, equal to about 14% of global supply. Based on their model, Brent Crude should be in the $190 range, up from $179 during the 11th week,” writes David Hay.
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And, as The Wall Street Journal reports, “The world is in the middle of a historic oil crisis, yet the biggest bargains on Wall Street can be found in U.S. energy stocks.”
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