JPMORGAN JUST RAN OUT OF A BASE CASE.
JPMorgan is now speaking plainly: they can no longer model a clear “endgame” for the Iran war. The assumptions previously used to assess economic impact are being broken one by one.
Brent once rose to ~$105, while JPMorgan’s estimated fair value is around $90.
U.S. Diesel: $6.31/gallon, a record high.
U.S. Treasury 10Y: above 5% this week.
About 10M bpd of supply has been disrupted.
Every additional 1M bpd lost could push futures up by around $4 per barrel.
Inventories are down by 555M barrels compared with what JPMorgan previously estimated.
Additional U.S. fuel costs, as estimated by Brown University, are about $109.1B, equivalent to $832 per household.
My take: This is no longer just a story about oil prices.
If the energy shock persists, it could transmit from oil → inflation → yields → consumer spending → corporate margins.
Most notably, JPMorgan can no longer provide a clear baseline. When input assumptions keep being broken, it becomes harder to price the risk premium.
Meanwhile, today’s oil price has pulled back sharply to the $95–100 zone, suggesting the market still believes supply will stabilize again.
THE OIL MODEL JUST SAID: “WE NEED MORE DATA.”
Guys, do you think the market is underpricing oil risk, or overpricing the likelihood of a prolonged war?
#Oil #iran #JPMorgan #Macro
JPMorgan is now speaking plainly: they can no longer model a clear “endgame” for the Iran war. The assumptions previously used to assess economic impact are being broken one by one.
Brent once rose to ~$105, while JPMorgan’s estimated fair value is around $90.
U.S. Diesel: $6.31/gallon, a record high.
U.S. Treasury 10Y: above 5% this week.
About 10M bpd of supply has been disrupted.
Every additional 1M bpd lost could push futures up by around $4 per barrel.
Inventories are down by 555M barrels compared with what JPMorgan previously estimated.
Additional U.S. fuel costs, as estimated by Brown University, are about $109.1B, equivalent to $832 per household.
My take: This is no longer just a story about oil prices.
If the energy shock persists, it could transmit from oil → inflation → yields → consumer spending → corporate margins.
Most notably, JPMorgan can no longer provide a clear baseline. When input assumptions keep being broken, it becomes harder to price the risk premium.
Meanwhile, today’s oil price has pulled back sharply to the $95–100 zone, suggesting the market still believes supply will stabilize again.
THE OIL MODEL JUST SAID: “WE NEED MORE DATA.”
Guys, do you think the market is underpricing oil risk, or overpricing the likelihood of a prolonged war?
#Oil #iran #JPMorgan #Macro
