By the time a barrel of oil reaches shore, 30% of its price is freight.
ADNOC CEO Jaber recently laid it out: before the Iran war broke out, logistics costs accounted for only about 5% of the price per barrel. Now they’ve surged to 30%. The cost of shipping and insuring a barrel of oil hurts more than the price difference in the oil itself.
The inventory numbers are even more alarming. Since the trouble in the Strait of Hormuz began, nearly 1 billion barrels have been drawn from global crude inventories. Diesel stocks in some markets have fallen to their lowest level for this time of year in 35 years, and there’s still a 600 billion cubic foot shortfall in LNG supply. Goldman Sachs has gone ahead and raised its oil price forecast: Brent is now projected to hit $105 in December, up from its previous forecast of $90, with an extreme-case estimate of $140.
But the short-term market action is baffling: the U.S. and Iran are discussing diplomacy in Doha, and U.S. crude briefly fell more than 3%. Iran is standing firm too—no talk about the Strait of Hormuz unless sanctions are lifted. Both sides are putting on a show of “we can negotiate, but we can also fight,” leaving the market to guess.
Crypto, meanwhile, has already started climbing back. $BTC has recovered to around 79,000 after the biggest hack in history, while ZEC is leading major coins. But after Binance withdrawals resumed, another $3.6 billion flowed out on Sunday. Panic hasn’t spiraled out of control, but it hasn’t gone away either.
My take: the geopolitical premium has already seeped into physical markets. Freight, diesel, and LNG are all pricing in the war, while paper prices are lagging behind. Don’t bet on one direction in this kind of dislocated market. Keep your hands in check and wait until Tuesday’s midterm results are in.
NFA DYOR
#原油 #比特币 #中东局势 #高盛 #Federal Reserve
ADNOC CEO Jaber recently laid it out: before the Iran war broke out, logistics costs accounted for only about 5% of the price per barrel. Now they’ve surged to 30%. The cost of shipping and insuring a barrel of oil hurts more than the price difference in the oil itself.
The inventory numbers are even more alarming. Since the trouble in the Strait of Hormuz began, nearly 1 billion barrels have been drawn from global crude inventories. Diesel stocks in some markets have fallen to their lowest level for this time of year in 35 years, and there’s still a 600 billion cubic foot shortfall in LNG supply. Goldman Sachs has gone ahead and raised its oil price forecast: Brent is now projected to hit $105 in December, up from its previous forecast of $90, with an extreme-case estimate of $140.
But the short-term market action is baffling: the U.S. and Iran are discussing diplomacy in Doha, and U.S. crude briefly fell more than 3%. Iran is standing firm too—no talk about the Strait of Hormuz unless sanctions are lifted. Both sides are putting on a show of “we can negotiate, but we can also fight,” leaving the market to guess.
Crypto, meanwhile, has already started climbing back. $BTC has recovered to around 79,000 after the biggest hack in history, while ZEC is leading major coins. But after Binance withdrawals resumed, another $3.6 billion flowed out on Sunday. Panic hasn’t spiraled out of control, but it hasn’t gone away either.
My take: the geopolitical premium has already seeped into physical markets. Freight, diesel, and LNG are all pricing in the war, while paper prices are lagging behind. Don’t bet on one direction in this kind of dislocated market. Keep your hands in check and wait until Tuesday’s midterm results are in.
NFA DYOR
#原油 #比特币 #中东局势 #高盛 #Federal Reserve