Oil Is Going Higher, Not Lower.
Our new market data and fundamentals DB - TEK2day Financial - is coming next week.
We are building an opensource market data and fundamentals database that tracks 4,700 equities. Our build will be completed Friday. The product is named “TEK2day Financial”. It will be released next week as a standalone CLI product, and connected to Kilby the week after. More to come.
In the meantime, TEK2day does not yet have an oil tracking product, but I came across these Kpler guys out of Houston earlier today (see below).
I still struggle with why Iran would ever relinquish control of the Strait. An agreement with the U.S. may be reached, but the U.S. does not control that outcome. We have zero leverage. Iran will always control the Strait going forward.
How long before insurance carriers are willing to underwrite polices for maritime travel through the Straight? How long to sweep the Strait for mines post-agreement so that travel is safe? How much higher will insurance premiums be once policies are in force again? How many shippers are done forever with the Strait? Even if we had an agreement today, are we talking 2 months? 6 months before some level of activity resumes? However, the sober reality is that we do not have an agreement and will not have an agreement until Trump takes a knee. The U.S. picked an irrational fight, now oil prices are likely permanently higher.
The physical price of oil is much higher than the futures price, the latter being the price that is quoted by the media.
How much higher would the physical price of oil be today if China did not curb oil imports so significantly? (see chart below).
To my thinking, physical oil will hit $200 per barrel well before it ever sees $80. $9-10 per gallon gasoline is coming before $3 (even higher for diesel fuel).
This permanent oil pinch has got to help Tesla (TSLA) shares despite the fact that the valuation is foolishly high, as is the case with most every equity it seems. Flying blind the market is without a care in the world. The punch that knocks you out is the punch you do not see coming.
